Prosus Nv Sp/Adr

Good evening, good afternoon, and good morning to you all. And thank you for joining the results call for process. We're delighted to have you here. We are coming to you live from our backyard in the London office. And we've put all of our results on the website this morning. We've put a video on there with an extensive presentation. So hopefully you have gone through those already. Because we're not going to spend too much time on that today, we're going to get straight into Q&A. And Abigail, would you mind taking the audience through the instructions for Q&A, please?

Thank you, Owen. If you would like to ask a question today, for those of you that have joined the Zoom webinar, you can use the raise hand function at the bottom of your Zoom screen. Once called upon, please unmute your audio to ask your question. For those of you watching on the webcast, if you would like to submit a written question, please type it in the Ask a Question tab to the right-hand side of the player. I will now hand over to Fabricio Bloesi.

Hello, everyone. Welcome to our results call. I'm happy to be here with you sharing a little more about what we are doing. That is exactly one year, a little less to complete the first one year as process CEO. I'm very excited about the moment now. I'm excited because of the results that you saw today. I'm happy that I promised you 400 million in delivery for 143. So it's a good start. I'm happy with the increase of dividends of a hundred percent. It's a good start. My opinion, there is still small numbers. They are going to grow a lot, but it's a good start, but I'm more excited about the momentum of the company, about how the company is behaving. I told you six months and one year ago about the importance of the culture, what means people being more entrepreneur, solving problems faster, communicating inside the company faster. So the company today is moving in a speed that is very exciting. We are solving problems faster. We are innovating more in thinking about the future. So I'm really excited about the next two or three years. Unfortunately, talk about the next two or three years is going to be in our capital markets days in two days. So hope to see you there and hope to answer all the questions you have for today. So let's go.

I would say it's fortunately it's going to be there in two days at the capital markets day. So look forward. Let's see you there. So thanks for laying the groundwork there for us. I'm going to ask a couple of questions before we kick it off to the group. Nico, I'm going to start with you. So It's great to see that we've had a focus on growing profitably, driving revenue and having that fall to the bottom line. What do you see as the opportunity for some efficiencies to drive profitably on the core slide?

Thank you for that question. I think growth has been very important to us and we've delivered by growing 21% in the last year, two times faster than most of our peers. But most importantly, That is translated into some excellent operating leverage for most of our businesses. Two examples that I can give, one is if I look at our iFood business, especially a core restaurant delivery business, we've now achieved an adjusted EBIT margin of 28% on the back of the 50% revenue growth that we've seen in that business. Likewise, our online classifieds business, that has grown in stop line by 18%, but profits by 60%. 1% over the period. So clearly showing that we have efficiencies and scale in this business that allows us to grow both profitability, but as well as free cash flow, which is very important. Also on the corporate side, we, a year and a half ago, moved away from our old segment structures. And through that, we've been able to maintain and manage our corporate costs well. that has declined by 1% over the last year. So I think if I look forward, there's significant opportunities for us to grow. And as we've illustrated in the past year, we can still improve margins and there's some additional operating leverage to come through for most of our businesses. So that quite excites me about the future. Okay, great.

Let me chat based on what Nico just said. When you talk about AI disruption, we also talk about increasing efficiency operations. And I think a lot of the increase in our results is related to strong innovation. And just to complement, you said you reduced it by 1%. I think I intend to reduce 10 times more our corporate costs and our costs. We have to keep being a very, how can I say, aggressive company in terms of being across the very cultural. Great.

Look, I think certainly for people internally, unless you've been sleeping under a rock, there's been a clear pivot in the strategy. We're now focused on having process become the number one lifestyle e-commerce brands in LATAM, Europe, and India. Fabricio, as you think about that and you look at three years out, what defines success for you?

Great. First, I think we start in a nice position. For example, in Latin America, what we have now is iFood, leveraging iFoodPub or FinTech business, these two foundational business with high frequency, helping commerce with Olalex, travel with Despegar that we completed acquisition, and events with Simpla. This is a very nice flywheel where we share knowledge, we share customers, we share growth. It's starting really to work in Latin America. So when I looked a few years ahead, we have an amazing benchmark in Latin America that is Mercado Livre. I think we have to have the size of half of Mercado Livre, at least. I think thinking big is to have another Mercado Livre. Not in terms of competing with their products, because we're more focused on lifestyle, e-commerce, not real box delivery. But that's the size of the opportunity I believe we can build in Latin America. If we look here in India, the big thing today is integrating more our investments. We have PayU in the foundation. We have Swiggy also, as I just said, high-frequency payment and food delivery of the foundation. But we have many other amazing businesses on top of that, like Michu or Urban Company. I believe in a few years, we are going to be generating a lot of synergies between those businesses. We already are generating. We're going to talk more about that. But there will be much, much, much more to create a real big tech group in ecosystem in India. And in Europe, we are just getting started. Obviously, we have good business on OLX and EMAC on Eastern Europe. But I think in three years, we are going to be strong in all Europe. with a very strong ecosystem where we have customers all around Europe using all our applications. Today, hopefully it will be not only these three businesses, but other businesses that we may add to our flywheel. Because we are moving very fast, innovating a lot with a great culture of execution and entrepreneurship, I'm quite confident we are going to do that. Let's go for it. Let's do it.

Look, I think one of the things that's been most apparent at the company is the change of the culture, right? It's a focus on impact. You see today results, innovation. And Nico, maybe this one to you. I think there's definitely more increased transparency, right? And we're seeing a discussion of EBIT and EBITDA. So maybe if you could give us a little bit more, like what's driving that?

So just on our key financial metrics, just to remind Everybody, the key things that we focus on, revenue growth, obviously very important. Adjusted EBIT in our key profit metric for a long time. And then core headline earnings, which captures everything that we have in a group, including our key associates like Tencent in terms of the bottom line operational performance. Then lastly, our focus specifically So those metrics remain unchanged and we'll continue to focus on them and drive them forward to improve them. In order to improve just comparability with many of our peers and also focus from mostly the analyst community on adjusted EBITDA, we have also provided that information to the market with a clear reconciliation between adjusted EBITDA and adjusted EBIT.

Great. I just got a text from my wife who said I'm making this call about money for asking too much questions. So I'm going to open it up to the audience right now. First, we have Cesar. Cesar, remember to unmute yourself and then your question, please. Hello, Cesar.

Hi, everyone. Can you hear me?

Yes.

Thanks for the call. Congrats on the results. I have two questions, if that's okay. One for Nico and one for Fabrizio. The first one for Nico, I'd like a clarification on your M&A for power. How much do you have today in terms of M&A for power, assuming 10 cent stock price is 500 Hong Kong dollars and then change commitment to your investment grade policy? That's the first one. And then for Fabricio, you've talked a little bit about it, but wanted to understand a little bit better, what are the three biggest changes you've made to the organization since you assumed this role as a CEO? Thank you so much.

Cesar, thank you. Let me take the first one. So we ended the financial year at the center about $17 billion of cash. As you know, we have the commitments relating to the Desbergard transaction, which we closed in May, therefore subsequent to our year, as well as the Just Eat acquisition that's still being executed. So that's a commitment of about $7 billion. If we knock that off, it leaves us about 10. We've received about a billion, just 1.2 billion actually from Denset as a dividend in early June. That leaves us with, on a performer basis, about $11 billion of cash that's available to be used. You ask in relation to our investment credit rating, at the current 500, so it's a snapshot in time view, at the current 500 Hong Kong dollar share price, essentially there's no offset against that relating to our credit metrics. So the full amount is in theory available. I think we've also been clear, though, that currently we've focused on, we've just completed the Desperate Card transaction to make that better, to support that business, bring it into our latter ecosystem. And then the focus will obviously also shift to the JustEat acquisition. So those are our key priorities that we focus on in the short to medium term.

Three things that we changed in the company. Thank you for the question, Cesar. Look, the first thing is culture. And it's a funny thing. I go to meetings with investors. Many investors don't like to talk so much about culture or this culture. funny things. I think you are wrong. You should spend more time talking about that. We became a tech company and tech company has one big asset that these people. So when I talk about changing culture, we are talking about moving faster, communicating more openly, dream big and communicate the dream with everyone. Some of you can think, okay, so you're nice to make this motivational speech. What's the impact in the company? Actually, the increasing results that you are seeing is the impacting 30,000 people going in the same direction, people collaborating more and being more aggressive on what they should do, when they should do, why they should deliver things very fast, why they have to play to win in what we are doing. So I think we have a more aggressive culture to create and build the future, and this makes all the difference. I will tell you one more thing. 443 million is a good start. Yes, come on. It is small. It's going to be much bigger because of the change in culture. Because I have now 30,000 people that believe we are going to do much better in the next one year, and we will. Hopefully, I will share much more with you on Wednesday. So the culture is a big change. The momentum and how people see the company is very big. It's a big change. Two other things to reinforce is the change in terms of innovation and ecosystem. So first, innovation. I don't think there is overhype on AI. I think there is underhype on AI. Innovation with discipline. I hate to overpay because you saw a nice PowerPoint on AI, but there will be so much transformation. There will be trillion dollar companies that are going to use AI to redo every segment. From your segments of investing, from how we do travel and food and everything else, we have to lead on that. Probably the leaders on this area are going to be in Silicon Valley, yes, but we can create global leaders in Latin America, in Europe, in India, And I believe you can create as big as company if you are winning on these three areas than the Silicon Valley company. So this is a big, big, big opportunity. And the company is really talking about innovation every day, how we are going to be the best in the world. On Wednesday, we're going to talk about large commerce model, how we train AI models. We use open source reasoning models to fine tune open source models to insert in a model all the knowledge of the company. Very few companies in the world are doing that. Very few. That is five or ten, that is. But we are in the cutting edge of the innovation, doing that in Amsterdam, in Brazil, and sharing that with all our companies. And the third one is talking about ecosystem. We talk about ecosystem. If we want to invest, does this investment help our ecosystem? We share information internally all the time. So the company is more efficient, is moving faster, is innovating more. That's why I'm confident in the next six months are going to be better than the last ones.

You know, one of the best examples, I think, of culture driving results and growth is the story you tell about iFood when below 10 million orders, you said we're going to 100 million. And most companies would go, well, how would we do that? But there's an expectation of success that's driven by the culture, which I think is really interesting.

The culture should define big goals and run for that. The big goals we are discussing here are bigger than everything that you are seeing from outside. It's funny, some people say, oh, it's 400, it's good. It's going to grow many times, many, many, many times. We are going to show a little about that on Wednesday. So we are playing for win. We are aggressively playing for win. And the results of that are improving the results that you are seeing.

Great. All right, let's go to Will Packer, please. Will, don't forget to unmute your line.

Hi there, and thanks for taking my questions. Firstly, could you update us? Good to see you. Could you update us where we stand on the JET regulatory review and whether there are any indications of complexities around your ownership of a large stake with Ford Seats and Delivery Hero? And could you share us with the perspectives of your advisors and how they see that risk? And then secondly, a kind of more wide-ranging question. So we've heard a lot about how generative AI can boost processes, growth outlook. Within Tencent, from Tencent, we've heard about ad targeting, boosting ad revenue in the short term, then agentic AI and WeChat or faster content creation, driving more engagement and monetization. In terms of tangible benefits for your ecosystem, is it that, and the integration and synergy between them, is it improved targeting and monetization of consumers due to the data leaked? For example, classifying food delivery typically haven't been considered synergistic. Or do I have to wait till Wednesday and I hear lots about it then? Thank you.

Or what?

Or does he have to wait till Wednesday? Yes, for both.

Okay, thank you. See you next time. No, just kidding. The first one, let me tell you good news first. Not good news only, but say compliments. I complained a lot about European Union in the past. I told them that They have the wrong way to look at tech. I think they are trying to avoid big tech at all costs and preventing everything. And I think this view that was there for the last 10 years is completely wrong because they avoid companies to grow in Europe. consuming the technology done in California, in the US. And the world is decoupling now. So it was a quite bad strategy. You heard me many times about that. But we interacted with the European Union for the last one, two months in the first phase of the discussions. And I want to make a compliment that they were very fast. They asked a lot of data. But they asked for more data. They processed the data very fast. So things moved fast. I was very happy about that because everyone, everyone, without exception, said, we're doing a mistake investing in Europe is a mistake because it will take two years to answer you that's not what happened we spent we talked we are talking very fast all the time but I think it's an amazing signal I think Europe the last five and four months were very was very different than the Europe one two three four years ago therefore I am very optimistic as I usually am but I data point. Because we moved very fast in this first share of data, we filed today our formal request for moving on with the Just Eat approval to GigiComp. This is substantially ahead of the original timeline that most of lawyers That's great news. That said, we find that today we are in the middle of an official process. I obviously will not comment anything related to delivery here or this process because today we started an official process. The great news, in my opinion, is Europe knows that they need to move faster in tech. And I'm still confident that we are going to have this deal approved fast because it is very good for Europe to have a bigger tech player, European tech player, invest in European companies. So I'm confident we are going to keep moving fast.

And the second question was on the role of AI in propelling our ecosystems. He said, from the outset, it doesn't look like a finance company and a class-wise company would necessarily be in the same ecosystem.

Yeah, and he gave us an example of someone doing that. Okay, so to answer this question, we'll talk a lot about that on Wednesday. So don't miss our Wednesday. What we are doing exactly is creating new ways to predict behavior for the customers. When you talk about large commerce model, it's exactly what you just asked about. Can we use the new technology approach of using a reasoning model, train this reasoning model, fine tune this model to understand behavior? The answer is yes, we are doing that. We take unstructured data from different companies and we can train a model that can talk He doesn't know the name of the customer, but he takes one trillion transactions for all the customers. And you can say, I know this about this customer. When I say one trillion transactions, it's everything from customer support to interactions, what they bought, what they don't bought, what time they entered, what message he received, everything. You see, before the current technology with language models, it's very difficult to integrate. Very difficult to integrate a food delivery company and a OT online travel. But now we can integrate because the language models, they integrate everything. So integrate reasoning, language models, all our data, and we have something that is proprietary because it's using all our data. and you can predict better demands from the customers that's what we are doing we are going to share a few results and demos on wednesday and we are confident that this is one more competitive advantage and i think we are ahead of many people in moving on this competitive advantage if some of you think so that's what i think is going to move us to create the next 100 billion dollars Yes and no. Yes, I think we are going to be ahead for some time. But even more important, we have a company that is moving fast on innovation, much faster innovation. We have 30,000 people that are creating new models and technology faster. To win as a tech company, we have to do that over time. Because reasoning models is a big thing today. It will be a different thing in one year. And we have now a process. created a culture where we are always moving faster and using new technology. So Wednesday we showed some examples, and I'm confident that we are going to use the ecosystem we have in Brazil and in India and in future in Europe as a competitive advantage because of our data and our forward-looking AI approach.

Yeah, and we're going to hear a lot from Euro on that on Wednesday, so it's a shout-out. Great, thanks, Will. And over to you, Andrew, from Barclays. Remember to unmute your line, please.

Great. Good afternoon, guys. Thanks for your time. Two for me as well, please. The first one is on the dividend coming in from Tencent and your attitude towards FATS. So now that the business excluding Tencent is free cash flow positive and self-funding, How do you think about using that cash inflow from 1010 dividends going forward? Do you see that as something that you will invest back into the non-1010 assets or is something that could be distributed back to process shareholders over time? I mean, the second question is on the Meituan stake. Interesting situation, I guess, now with Meituan competing with Delivery Hero in a few markets and now directly with you in Brazil. Just kind of update us on your thinking behind that stake. Thank you. Okay.

Do you want me to take that? Yeah, please. Andrew, thank you for the question. I'll take the first one on the dividend. I think, firstly, in the last few years, our overall free cash flow generation, if you look at it, it was actually in the aggregate less than a 10 cent dividend that we've received. So this financial year, although it's a fairly small number at this point in time still, I think it's an important milestone, as you pointed out, that essentially our Title III cash flow number is a 10 cent dividend plus a contribution from our e-commerce businesses. And then if we look forward, clearly our ambition is to continue to grow and then generate even more profits and cash flow. That will allow us to also share that more with our shareholders. And we've taken some steps relating to that. by increasing our dividend by 100% or doubling it at the process level. And as we go forward, we clearly will become less dependent on just one underlying free cash flow source. Our ambition is to have significant cash flow from our ecosystems that we're going to build, most notably from Latin America and Europe and India over time. And we'll share that with shareholders. Yeah.

Andrew, hope you are happy. We increased the dividends by 100%. So I think it's a good start. We don't think small, Andrew. We are going to generate billions of dollars of results outside Tencent. Billions. So today Tencent is 1.2. You can clearly see that my expectation generates more outside Tencent. I think Wednesday we'll share some numbers about the future, but It's not like a dream result. We have clear plans to get there on a few billions of results outside Tencent. So don't think small. Don't think only on the Tencent GIF then. We will have much more than that. Your second question was the Mate 1 is entering in some areas that they believe is competing. That was the question, I think. And Brazil. And Brazil. Yeah, I heard about that too, Andrew. Look, our big strategy is invest more in companies that can reinforce our ecosystem. And we are going to keep doing that aggressively. So I think Mate 1 has less probability of winning internationally. considering their last announced international expansion. They are going to face some tough competition. I would say as a Mate 1 shareholder, I'm disappointed because I think their risk of failing increase. And therefore, we might sell part of the Mate 1 shares if you want to invest more in other areas with more connection to our ecosystem. So for example, if we want to let's invest more in some business in Latin America that we believe reinforce our ecosystem, we could sell part of MateOne shares or everything that we think is reasonable to invest more in business that reinforce our ecosystem. And we are going to do that looking to our shareholders. If we have opportunities to grow faster and better than MateOne in some of our ecosystems, we will do it.

And there's been precedent for that in the past, where we've invested in iFood to save off some competition.

So, I think they are growing. The risk of METMA now, in my opinion, is to overreach their international expansion. They did well in Hong Kong and their first Middle East investment. Now they are trying a second Middle East expansion, and they are also trying Latin America at the same time. Let's see, but we are less confident in the international expansion strategy today than in the past. Okay.

Now let's go to Silvia from Deutsche. Silvia, remember to unmute yourself. Hello, Silvia.

Good afternoon, everyone. Can you hear me?

Yes.

Yes.

Thanks. I'll also ask a couple of questions. So the first one is referring to one of the slides that you presented on the website showing the ecosystem supply wheel with the key categories being food, fintech, commerce, and experience. And I noticed that in Latin America and India, the experience slice of the pie looks to be already served by Despegar and Urban Company. But in Europe, that appears to still be vacant. So I wanted to ask if you could comment on whether filling this gap is a key area of priority for future M&A activity in Europe? Or do you envision launching experiences organically? And what specific advantages or challenges do you see with each approach? And then the second question is, now that the Despegar acquisition has closed, can you elaborate a little bit on the integration plans you have in place for the first few months? I appreciate this might be something you discuss maybe on Wednesday, but if you could identify some low-hanging fruit that you have identified for now. And will you be carving out a new segment for the experiences similarly to what you did for EdTech once the segment itself became large enough in the past? Thank you.

OK. So first, we elaborate how we are going to feel the experience go in Europe. No. Sorry, Silde. We are going to do things organically for sure. We are going to do investments on this area for sure. But I don't want you to tell much more about what we are going to do because it would make our next moves a little more difficult. What I can tell you on that is I think the big focus on experience now is Latin America. It is the Despegar move. We are going to announce lots of things on Wednesday. Not one, but a lot. We closed the deal just one month ago. I think iFood, I think they are showing three to five connections already between iFood and Espegar. So I think for a few customers, you can already enter, you can get discounts, buy things inside the iFood. The large commerce model also integrates both of them. We are starting to run the models now. There is three or four specific cases where obviously, I think we already talked about that. On the loyalty club, we have high expectations of offering travel to our current users. So we are going to get on details on that on Wednesday.

And then on experiences also, if we're a successful ecosystem, it's going to be a combination of owned and operated investment and partnerships, right?

Yes. Yeah. For example, in Brazil, we made a partnership with Uber. So we are keeping the food delivery in many offers, but not the mobility. Uber is doing mobility and not the food delivery. So I think it's the combination of the three, Silvia. I think the idea behind that is there are ecosystem benefits when we use a high-frequency platform like Justice Decode, where people buy many times per month to cross-sell to other services. good in technology. So our expectation is, we have a good expectation that we are going to implement that in Europe. But just before getting back to the next question, my big priority now is to close the Justice Takeaway deal. So as I told you before, we closed the Despegar, very good. Hope you are happy. We did it very fast. I cannot do five big and complex deals without closing the first one and showing results. Hopefully, we are going to show the first results of Desperado Wednesday. We will show for sure, but of integration at least, not numbers yet because it's too new. My next step now is close just it, and then we are going to, after that, look for other adjacencies, but that's not the biggest priority today. Great.

And then Niko, she asked a little bit about whether experiences might become a segment itself if it became big enough for system regions.

Yeah, I think that, you know, clearly we will disclose that separately going forward so people can track the progress of especially Despargar. And also, I think we will start to share more about how the numbers relating to the various ecosystems are coming together. So we will continue to improve and share more as we go forward.

Yeah, I hope you appreciate. We are trying to share more. We are doing more letters with news. We are putting more data in the site. We create a new site with more info. Wednesday, there will be all info So our intention is we give you the data and you do whatever you want with that. So hope you appreciate it and we are going to keep that on the display. And we're doing it in the garden here, so a lot more transparency face-to-face. Looks like I'm in Amazon. I'm not, I'm in London, but they did this.

You were pruning the hedges a little earlier, right? So let's go to the next question from Marcus at JP Morgan.

hi everyone um maybe just one question for nico um i mean clearly we highlighted this a very impressive result in terms of the bottom line um wanted all the way up 140 million of habit about 800 ish in 26 and then you talk about billions thereafter so clearly the wrong strong performance in terms of avid how can we think about the free cash flow do you think also then the free cash flow will grow pretty much conceptually, at least, pretty much in line with that EBIT number. Or is there, I mean, it's obviously X10 standard, which I guess will probably have its own dynamics. But X10 standard, can we assume free cash flow follows EBIT very much, or even potentially outperforming? That's the question.

No, Marcus, thank you for that question. It's an important question. I think, firstly, just to point something out technically, and obviously the EBIT number is a before tax number. So free cash flow is somewhat depressed because as we get profitable, we do need to pay the governments their due as well. But I think if you look at the progression, we improved our adjusted EBIT by just more than $400 million in the year past. We saw very much a similar improvement in free cash flow. Yes, it got to marginally positive, but it's more than $300 million improvement in free cash flow year over year for e-commerce businesses. For that, if you consider that that's an after-tax number as well as working capital elements, you can see that the profitability is very much translating into cash generation. And we expect that to continue. So you point out to our mission in terms of FY26, 800 million, which we'll also talk more about and give more details on Wednesday. More than 800. More than 800. We'll talk more about that, but definitely free cash flow needs to follow that same trajectory.

Okay, perfect. Fantastic.

Thanks, Marcus. Now we're going to go to Lisa from Goldman. Lisa, don't forget to unmute.

Hi, can you hear me?

Yes. Hi, Lisa.

Amazing. Yeah, hi. Two questions, please. So, firstly, on iFood, obviously given, you know, Sydney University concerns around the May 2nd entry, could you maybe confirm how much reinvestment into iFood is sort of baked in into especially effort 26 and out to use that as well. And do you still think margin can improve? From here, obviously in 25, the margin was quite impressive, but obviously there is a significant competition going ahead. So any color would be very helpful in terms of the trajectory of that margin going forward. And the second one is, could you maybe just comment on, you know, the top line growth that you expect for FY26, so that 800 billion plus of EBIT, what is the top line growth assumption behind to basically to achieve that? And if you can also comment on maybe the latest environment, latest current trading, or you see any impact restriction on the macro environment in areas like OLX, Winston's or EMAG, that would be helpful. Thank you.

Okay. Good. We have to divide here because you make so complex questions in many parts. Markets on iFood. Let me give you a few sense on how things are doing in iFood. iFood had just a food delivery business first. Then we got just a 3P, then 1P. First, just the 3P were profitable. Now 1P is profitable. The budget for the next year already includes a reasonable number to increase in competition. So we are confident that we are already investing to keep our competitive position. But I want to give another perspective. There is many other businesses inside iFood. For example, our fintech business. I think when you are analyzing the company, you don't understand well these numbers yet. I don't know if I want to share much more details on it. So maybe it's our fault. But we are giving credit to hundreds of thousands of customers. We have a meal voucher business with close to a million customers now. Both of them are growing. We have the payment business also. So our fintech area is profitable and growing a lot. We are going to launch a few, we are already testing, but I don't think iFood announced it yet, but our FinTech area is expanding and the profitability is going to keep expanding a lot. So my point to you is that the adjacencies in iFood are also maturing and our profitability level are increasing because the core food and because the other business around that. If we expect to keep increasing the profitability, I think we will keep growing a lot the profitability margins of iFood. I don't know if we are growing the number or the margin.

What's the margin? Maybe to put some numbers to it. Okay. So these are barriers to help you. In terms of the core restaurant food delivery business, we've already achieved a 28% adjusted EBIT margin. Overall, the iFood business is at 17%. which means we're still investing in areas like the meal voucher, the grocery business, some of the fintech elements, although that has improved significantly. So that means that as those businesses get to profitability, there's still significant opportunity for us in the years ahead to improve that overall margin for the high food business. So I hope that helps you to conceptualize that. Just to get to your other two questions, you ask in terms of the revenue sort of expectations that we have that underpins the sort of the profit expectations for next year. And I think we plan to continue to grow at a healthy rate. And I think longer term, we'll talk about those ambitions more as well on Wednesday. Our internal targets are on a blended basis, all between roughly 15 and 20% for the various e-commerce businesses. And then you ask, well, how are we tracking that sort of in the first couple of months of the year? What do we see? I see our business has been ahead of our own internal plans at this stage. We are still showing good growth and the profitability improvements in the first while has continued.

I think we shared a quarter by quarter, a half year by half year profitability. Have you shared that yet? We have shared a half year. So you can see the growth is like very strong if you look every half year. So sometimes people look, many times people say, you did that, so now we're going to be flat or reduced. No, it is growing like that. Three months after, it is bigger, and we are ahead of the plan that we had. So we are confident. And I think we are confident because we are executing very well. The level of innovation is great. You asked about competition in Brazil. I want to remind you, I would compete against other global players with very good results in the past because the service is excellent. The customers love it. The quality of the product is very good. So our plan is to keep playing, keep winning.

You know, I find it's interesting. We get this question quite a lot to Investor Relations, and it's almost as though it starts next year. Whereas this is a company that has been playing offense for many years, right? To your point, they built the marketplace, they're building Pago, now they're going offline with Macinona. So it is very much, you know, they say offense is the best defense. So it's not starting from next year and investments.

It's been started for many, many years before. I think a few companies is winning, as iFood is winning. They become a little complacent because they become like a company that just likes to profit. The level of speed in terms of new product innovation, as I said, the adjacency is related to fintech. iFood is innovating to create the next $10 billion in transactions, what we are doing now in online travel agency. So this is a company planning to be or keep being one of the best operations in terms of tech in the world, one of the best in Latin America for sure. So having competition is part of life. We expect it to keep good margins besides of that. And we already have in our budget some money to this kind of competition. Thanks, Lisa. Thank you. And Lisa, probably we can invest more in adjacency business that can create even more profit around iPhone. So we are open to keep looking for opportunities on that. And as I told you, process has more $11 billion to invest. We have more, many billion dollars in companies that we are invested and we can sell to invest more in adjacency business. So we are going to keep playing for win.

Great. All right, thank you Lisa and then we'll go to Laura from Morgan Stanley. Laura. Hello Laura.

Hi, can you hear me? Yes. Can you hear me? Perfect. Hi, everyone. Two questions, please. The first one is a follow-up on the question on Despegar. What is the biggest type of synergy you expect to have between Despegar and iFood? And then secondly, any insights you can give us on the potential crystallization of some of your assets? Obviously, Swiggy IPO'd recently. What's likely to be next? Thank you.

OK, I will answer in 30 seconds, just because this is like a 20-minute section on Wednesday. So we listed many options. Today, we are running around five experiments on creating cross synergies. A few examples, we have a loyalty program with millions and millions of customers, and we are offering discounts on those customers to travel and hotels. But remember, we're not just saying this is a discount. We understand the customer behavior. We have a large commerce model to help to say who is that customer, what they look for, and We are confident we will move on to have good numbers on this kind of integration. That is five cases like that, that we are already running, that was launched in the last one to two weeks, but for parts of the base. And we are going to open all of that on Wednesday. So I can reinforce, we are quite confident. We have set up close to 70 million customers in iFood. The SPGAR is around 6 million in total. So we are very confident we can increase the SPGAR size because of iFood. But one more thing, we are confident we can increase retention and frequency in iFood because of the SPGAR. Because customers appreciate having benefits in travel and experiences and events.

Then I forgot the second question because... Well, I'd add also to that, you know, having more interactions with the consumers is always a good thing, particularly in an ecosystem which is similar to the... of more consumers in our core market. The second question was on our thoughts on crystallization.

Okay. I told the seven-month level that we would have around five IPOs in the next one year to a year and a half by the end of this year, by the end of this fiscal year, so until March next year. I think our expectation is more or less the same, that we already have this week the IPO. There will be more, three, maybe four in the next nine months. So there will be more public companies. We will have our share part of that. Because some of them are already filing and are already preparing the IPO, I got a strong recommendation. Don't say the names of the company. And just check the public markets reports from India. But I think, so I'm not going to say the names of the company, but even before that, I think we had a thesis. We invested in India five, seven years ago. And the India thesis is maturing. We have a few winners, not only Swig that is public, but the other ones. And we are going to keep updating the list, our list of companies that we invested much earlier. For sure this year, a few more of them. But I will not comment specifically on any one of them. Great.

Thanks, Laura. And then we'll go over to Nadim. Nadim, please don't forget to unmute.

Hi, everyone. Just one question for me. I'd like to double click on the topic of cultural change again. I mean, in my experience, this kind of change can take many, many years, especially when you're also moving from a holding company structure to an operating structure, and you've got many different opcords all over the world. So I just like to understand, like, is there more to come in terms of the cultural transformation? And secondly, with the acquisitions that are going on, I mean, how do you integrate them into that culture? It seems like culture is a big driver of your operational turnaround. Thank you.

Yeah, Nadir, where are you based?

I'm based .

Johannesburg. Johannesburg, good. I have to send you some gifts for the Results Day. This is the first question on culture ever. Amazing, Nadine. You just won the prize. Look. It's a jacket. It's a jacket. I brought the jacket. Yeah, the NASPERS one. I think you are right. Usually, it takes a lot of time. When I arrived, I said, this is my biggest priority because you can think Fabricio is doing things. Fabricio is pushing to change the culture. But what makes process move faster is 30,000 people moving in the same direction more aggressively. So we were very aggressive on this change. We are pushing a lot, everyone, to say, look, this is the new company. This is the future. This is where we are going. Hope you love it. Many people say, I love it. Maybe you don't love it. And you say, OK, part of life. Just move on, because we are going to be that company very fast. I think I've been very aggressive in this cultural change. I expected to have full results in six months. I am a little, how can I say, too aggressive. But I think one year, I didn't go through full results in six months. But one year after, we are having strong, strong, strong results. We just published last week, I think, a new page in our website called The Browser's Way. So go there, check the video. We have a half an hour session also on mainstream culture. So I know some analyst doesn't like to see culture in the presentation. There will be half an hour on that, and it's the best part. So I think you are right. It usually takes two, three, four years. We don't have two, three, four years. So we're dealing much less time. And it's a different company how people look to challenge and move faster every day, every one. And that's where the results come from. Then you ask, how is integration on that? Managing that well is a very important thing for the company, so invest a lot of time. I wouldn't say integration, sharing the best practice, sharing what is non-negotiable. So, entrepreneurship, obsession about results, innovation to create the future, take risks and test 10 things are non-negotiable. If someone doesn't think that this is amazing, he should leave the company or You should leave the company anyway, one way or the other. But we don't try to say, you company be integrated. I don't like the word integration. We don't try to say, this is the process. Just come here and do the same as we are saying. We need entrepreneurial behavior. So instead of integrating, we share amazing practice. We show what is the most amazing result on earth. And people that are entrepreneurs, they say, I'm going to do as good as or better. And that's where it comes down. force to keep the company moving faster. So it's not like an integration. It's more like this is what exceptional look like. We expect better than that from everyone else and people are responding. So it's their merit. And that's why I'm confident that the results in the next one year is going to be better because the company is moving much faster. Check the page and come back to listen about culture. We're going to talk about more details on Wednesday.

And as time goes by, you have more opportunities to talk about the successes you've had and to get together to reinforce the messages. And I think that builds culture very well as well. OK, so we're running out of time here. We have one last question that's written in and it's about kind of broader international expansion. And they asked specifically whether you would be interested in branching out to the Middle East or Kuwait. But also maybe add to that in the context of kind of prioritization of where we are prioritized and perhaps why we're prioritized there.

Let me tell you a few things. We have opportunities in the Middle East, lots of them. We have opportunities in Africa. We started in Africa and we have many businesses there. We have opportunities in Southeast Asia, in the U.S. So there are many possibilities to invest around the world. What I didn't like... six months ago, is that we are looking to all of them without putting 90% of our energy in some focus where we should be the best in the world and the best in that region. I think we are doing that different today. Our focus is in Latin America, India, and Europe. And 95% of the energy and capital of the company is to be we on these three areas. We are going to be in the three areas. Then in the future, for sure, we are going to have a fourth area. Maybe when we win the fourth area, we're going to have a fifth area. Until there, so our focus is aggressively on those three areas. We have legacy investment on other areas and we keep people doing experiments outside. So it's very different than doing like a billion dollar check is to do a $5 million experiment on some of those areas. And we keep doing, specifically Middle East, for example, to learn, understand, start developing something. So in the future, we may prioritize that. So it's not our priority today. And we get aggressive. We aggressively say, this is our priority. Let's focus on that. At the same time, this is ambidextrous behavior. We know that in the future, we'll have more things. And we keep experimenting. Very amount of resources, very entrepreneur behavior to test, to start to learn where is our next big bet. We are experimenting other things. But I think we should not talk about that today because we have And we have to win on those three areas.

That's great. Listen, I think I'm worried about it beginning to rain, so we should get in.

So why don't we close if you want to... Look, today was the day to talk about numbers. Hope you enjoyed talking about numbers. Wednesday, we'll talk more about ecosystem, innovation, strategy, culture. Many of your questions was related to that. Merchandise, don't miss Wednesday. Hope to see you all there personally. And my closing remarks, I'm very excited about the company now. I know I'm naturally optimistic. Some of you thought that I was when I joined it one year ago. I'm optimistic and I look to bottom line and results and discipline. So the good news is I look to bottom line and results, discipline, and I am optimistic. And I am even more now because of the quality of the execution of the company today. So I hope to have much bigger and better results to share with you in the future. Fabricio, we will talk about numbers. I know, it's true. There is numbers on the website. Everything on the website. Wednesday is the day. You cannot miss it. All right. Thank you very much, everybody. Good to see you. See you Wednesday. Bye-bye.

This concludes today's call. Thank you, everyone, for joining. You may now disconnect.