Just Eat Takeaway.com NV

AEX:TKWY

Earnings Call Transcript 2020-Q1

[Operator]

Good morning. Welcome to the Takeaway.com Analyst and Investor Call discussing the quarterly trading update and the impact of the coronavirus. This call will be hosted by Jitse Groen, Brent Wissink, and Jörg Gerbig. We will start with the introduction by Jitse Groen. [Operator Instructions]I would like to hand over the call to Jitse Groen. Go ahead, please.

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Thank you, operator. Good morning, everybody, and thank you for attending this call. I'd like to start with a disclaimer that we, the management board of the company have not been provided with information on Just Eat's trading performance and as a result, a trading update and this conference call are focused only on the stand-alone Takeaway.com results. We, therefore, can't provide additional background on the combination at this point in time.The U.K. Competition and Markets Authority confirms the start of its initial Phase 1 review of the Just Eat transaction on March 19, 2020. It now has 40 working days to conduct its review, which sets the deadline for notice of the Phase 1 decision for 19th May 2020.Before we focus on all the figures, I would like to spend some time to talk about the well-being of our staff, partner restaurants and consumers, which has been our top priority in these uncertain and unprecedented times. With thousands of employees and couriers, Takeaway.com has an important role to play in limiting the spread of the coronavirus. Takeaway.com implemented its contactless delivery for all orders and provides cleaning and hygiene equipment for couriers. Also, most of the company's office employees have been working from home since mid-March. To navigate [ for this ] crisis, we have set up a corona task force early in March, comprising of members of our senior management which has enabled us to quickly respond to changing regulations and take the necessary actions to maintain our service levels to restaurants and consumers. We are proud of our workforce that is used to work with peaks, to switch gears and set new priorities quickly. Our employees have been able to serve many people during the crisis, even while undergoing restrictive measures themselves.After the announcement of the stricter self-isolation measures in our Continental European markets mid-March, the number of restaurant sign-ups increased significantly. Takeaway.com has taken measures to speed up the activation process in order to get these restaurants online as quickly as possible. We are scaling up our teams where needed. This includes customer service to manage the increased number of restaurant sign-ups and teams of delivery drivers for our logistical service, Scoober.Takeaway.com decided to accelerate the rollout of Scoober to 9 new cities to support restaurants without own delivery capabilities. Pick-up only restaurants are also now welcome to sign up with Takeaway.com unlike in the past when we just were able to onboard delivery restaurants. This eases the switch for normal sit-down restaurants to pick up and delivery. Furthermore, restaurants that have been severely hit by the coronavirus crisis, [ carry plus ] Takeaway.com for deferred payment of restaurants commissions. These measures apply to all leading markets until the end of April. Takeaway.com has started many local initiatives to support organizations during the pandemic, including a Europe-wide initiative to grant more than EUR 4 million in free meals to hospital staff.Now to our trading update. Takeaway is one of the few and privileged companies that has only been modestly affected by the crisis. The most notable effect on our figures has been a, what we now believe to be a temporary impact on our March orders. Despite enormous shifts in user behavior and restaurant composition, our business continues to be very strong in resilience. In our Continental European markets, stricter self-isolation measures were introduced to limit the spread of the coronavirus in mid-March. As you know, these measures are focused on limiting social interactions, which basically meant that, among other things, all bars, dining, restaurants and sports facilities had to close doors. Delivery services continue to operate in all markets, while we have seen certain restrictions for pick up, for instance, in Austria, though these were lifted earlier this week. It is important to note that the measures were implemented differently across our markets, which led to different outcomes and different impact on our businesses.In the first days after the government restrictions, which led to a mandatory closing of dine-in restaurants, Takeaway.com experienced a material increase of applications from restaurants to be connected to the platform, both for marketplace and Scoober, attempting to compensate for the loss of pickup and/or in dining. As a result, thousands of restaurants have been added to our websites, including well-known chains and local heroes.However, we were also faced with a significant number of restaurants that closed as a result of the measures. It is fair to say that our offering reduced significantly immediately after the additional measures. While it takes some time to activate -- let me wait for Investor Relations to work on his phone. Very interesting ring tone. We were also faced with a significant number of restaurants that closed as a result of the measures. It is fair to say that our offering reduced significantly immediately after the additional measures. While it takes some time to activate the new restaurants online to expand our restaurant network. We do expect most of these new restaurants to stay on our network also after the crisis. Restaurant closures and a significant reduction of lunch and over hours orders from offices led to an immediate decline in order volumes in each of our markets. In particular, the B2B service in Israel was impacted most negatively by the lockdown measures. The B2C business in Israel, however, significantly accelerated, but from a much lower base. It can, therefore, not compensate for the decline in B2B. On top of these developments, Takeaway also suffered many severe DDoS attacks in these periods, affecting several hundred thousand orders.However, as you can see in the graph that is provided in our press release, order volumes recovered strongly by the end of March. And by now, our most important markets, including the Netherlands, Germany and Poland have recovered. Average order values have increased markedly. Although we would expect these to return to normal levels after the crises. 10bis in Israel, predominantly a B2B brand, is still lagging behind due to increased work from home, which led to a drop in business orders.Our restaurant delivery service, Scoober, saw the strongest decline. Scoober restaurants generally derive most of their revenues from dine-in orders, not related to Takeaway.com or other delivery companies rather than from delivery. As a consequence, far more Scoober restaurant than marketplace restaurants have been closed. Marketplace restaurants, which generally derive most, if not all, of their revenues from delivery orders faced less direct impact from government restrictions.It should be noted that Scoober only represents circa 7% of Takeaway's orders in the first quarter of 2020. This affirms the effectiveness and resilience of our business. Hybrid marketplaces like Takeaway have a broader restaurant selection, provide better value for money and have lower delivery fees compared to pure logistical players. Our model was not dependent on key resorts and sit-down restaurants, but it is mainly built around restaurants that are optimized for delivery. Our users are very sticky, and we grow mainly by a shift from offline to online ordering. Takeaway's penetration of the adult population in our leading markets is just over 10%, while approximately 70% of the adult population in these markets order food at least once a year. The penetration upside is significant and the current situation could lead to increased online penetration both from restaurants and consumers.In the recent weeks, we have seen a different demographical mix of users. As a consequence, average order values have been increasing markedly in both the Scoober and marketplace. It is likely driven by the current self-isolation measures and while average order values are expected to return to normal levels after the crisis, it also shows that our business model is resistant. Our cost base is flexible with marketing being the largest cost component. Half of our marketing costs are online cost, mainly Google, which is highly correlated to orders and online restaurants, while the other half is brand awareness, such as television and out-of-home, which is, to a certain extent, discretionary. Our customer services and delivery fleets can relatively easily be scaled up or down based on the needs.We've always taken a conservative approach towards our balance sheet, and we have low levels of debts. We have an outstanding convertible bonds of the principal amount of EUR 250 million, which is currently in the money and due 2024. At the end of 2019, we had a cash position of EUR 50 million. We have the ability to draw under the existing revolving credit facility, which is extended from EUR 60 million to EUR 120 million at the end of January 2020. The company is well financed and able to adapt to these uncertain circumstances.Lastly, we are EBITDA positive in the normal course of business, and therefore, not dependent on continuous funding, unlike most players within the online food delivery space.So to conclude, our mission has always been and still is to provide the best possible service to restaurants and our consumers everywhere we operate. This is now more important than ever.So after these updates, I would like to ask the operator to open the line for questions.

[Operator]

[Operator Instructions] First question is from Mr. Joe Barnet-Lamb from Crédit Suisse.

[Joseph Barnet-Lamb]

So 3 questions from me, please. First question. One factor you don't mention, but conceptually it feels like it may have impacted the business to me is pantry restocking. Do you think that's been a factor? And if so, do you think -- could you see a further pullback if individuals were to restock their pantries again? Question 2 and question 3 both relate to Scoober. First thing on Scoober. Could you speak a little bit about any potential cost initiatives on the Scoober side of the business? Anything you can do to reduce the financial burden with orders falling on that side. I think it -- you did sort of refer to the fact you can scale it up and down, but if you could give a little bit more detail. And then the final question. Have you seen consumers who previously used to order Scoober-based meals predominantly ordering marketplace meals instead, i.e., are we seeing them trying marketplace businesses and conceivably, could that be positive as a blend shift over time?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

To your first question about pantry restocking. Well, actually, that's part of the effect that we saw in March. You probably remember that a lot of the supermarkets were actually quite empty and people were stocking up on toilet paper and groceries. We certainly saw that effects around that time. But obviously, I can't say that everything returns on the materials because it hasn't. But I don't think that, that is a material effect that we see in our markets. Also because in most of our markets, you can actually still go to supermarkets relatively unhindered. So there's also now issue any more with pantry restocking into the supermarkets themselves. So I don't think that, that's a factor. There might be a little bit of an impact because people are reluctant to go to supermarkets. But that's obviously an impact that favors Takeaway.I will refer your second question to Jörg. And your last question around the consumer shift from Scoober to marketplace. Well, actually, we don't distinguish between restaurants, and we leave it up to the consumers. So naturally, we lose a lot of these Scoober restaurants, people will go to marketplace restaurants. And certainly, that has an impact. We haven't looked at that specifically, but because, obviously, the Scoober percentage drops, you can assume that we're more just from marketplace, that's logical conclusion from that. So I would say that, yes, people shifted, but they shifted because they selected a different restaurant. Jörg, can you take the Scoober question?

[Jorg Gerbig, COO & Member of the Management Board]

Sure. Sure. We'll do that. So with regards to your Scoober question, we indeed saw a drop, especially in Scoober, orders after the initial measures have been put into place by governments. And -- but we also saw, for example, on our fleet that a lot of the fleet people are coming from Eastern Europe and India, for example, and there's a certain percentage of people who actually dropped out of the fleet during the beginning of the crisis going back to the home countries. So that was kind of going hand-in-hand. So therefore, we -- the capacity of our driver fleet was amended basically to the amount of orders. And we also most recently saw again like that in some countries, actually the Scoober orders are also picking up again because we had a big inflow of new restaurants coming up on the one hand, and we're now getting those live so we actually saw that huge drop, as you can also see it on the order chart, also on the Scoober side as more of a temporary thing. With now most of the new restaurants being activated, we actually have a higher demand again, and we don't actually need to do some cost-cutting on the Scoober side.

[Operator]

Next question is from Ms. Miriam Adisa from Morgan Stanley.

[Miriam Anuoluwapo Adisa, Equity Analyst]

Two questions from me. Just firstly, could you give us a bit more color on what you're seeing in terms of consumer behavior between the different markets, specifically in correlation between order frequency and the length of the lockdown, perhaps in the market like Poland that went in earlier. If you could just give us a bit more color on what you're seeing in the different markets and how that differs by the stage of lockdown. And secondly, just wondering if you're doing anything around grocery delivery. Have you seen if any food delivery platforms pivot towards grocery? Just wondering if your thinking around that has changed at all.

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Thanks for those questions. Regarding your first question, actually, the behavior of consumers across the market is relatively similar. We do see, obviously, an impact in countries in which we have more logistics. You can think about Bulgaria and Romania, where more of our offering is simply logistics and you lose that offering. So obviously, that's not good for all the trends. In -- if you look at Holland, Germany and Poland, it looks very similar, but obviously, these measures were implemented in at different points in time. So you would see a time shift between those markets. But you can actually -- if you look at the Dutch and the German lines, you can see very clearly when these measures were taken because they are apparent in the graph. And if you look up when governments took strict measures, you can actually see the correlation. There were also a couple of measures. For instance, in Austria on pickup but also in Belgium, we are no longer allowed to be open after 10:00 in the evening. So naturally, that has a small negative impact on our orders, not a big one, but that's an effect. And there's obviously a difference also between countries. Sometimes we have a complete lockdown. Other countries like Holland, for instance, have a reduced movement in place, but you can still drive around, go to the supermarket and even go to other stores. So there's a small difference to that as well. But if you look at all these markets, unless they are structurally different, like Israel, like Bulgaria or Romania, they act more or less in the same way. And these are all mostly, of course, marketplace markets and not so prone to logistics.Regarding your second question, we have looked at grocery delivery. The issue for us, though, is that in a normal situation, we would not be very fond of grocery delivery because the margins on Scoober are negative. We don't think that with grocery delivery, they will magically become positive. So this is why we generally do not do that. Obviously, there's a need for it but as Jörg was also explaining while Scoober Takeaway hits, we also receive quite a big number new restaurants for Scoober. You can think of an accelerated rollout of McDonald's, for instance, in Holland, where we were starting to onboard those stores. So they came live earlier. Couple of nice brands that were previously only with our competitors, they went to us also because they needed the volume. And that compensates quite nicely for the reduction of Scoober volume. And as we said in the past, we employ our staff in Scoober. So that also means that for us, we simply need to fill the hours as well. And we don't really want to embark on the ventures at a time, and also for us -- because if we look at our results, it's not so apparent, but it has been quite -- especially the first 2 weeks, it has been quite stressful for us to keep the business afloat because obviously, everybody was at home. We're quite used to working via video because we are quite a centralized company. So it's obviously a lot easier for us, as a centralized entrepreneurial company, to suddenly not go to the office anymore as opposed to, let's say, a bank or something else. But still, we had quite a lot of things that we needed to arrange also in terms of hygiene measures for the hubs. As you understand, our hubs, we like that model a lot, but it's a gathering of people. So we also have to reduce the amount of people that can go to a hub. So it has been quite complicated for us to deal with that. So certainly, we're looking at grocery delivery, but it's not the first item on our list.

[Operator]

The next question is from Mr. Marc Hesselink from ING.

[Marc Hesselink, Research Analyst]

Could you tell a bit about -- you said large number of restaurant onboarding, but what are you seeing on the customer side? Do you see a lot of new customers that weren't used to your platform coming online because of the situation? And then the second is a follow-up on that, maybe a bit more speculation from your side. What do you think what will happen with both the restaurants and these active consumers beyond the current lockdown periods?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Thank you. We have received more new customers than usual. But given that this hasn't been going on, fortunately, for quite a long time yet, it's difficult for us to now say how many new customers we're talking about because, obviously, we also have fluctuations in the new customer account. But for the time being, we do see more new customers, and we think that's quite related to our brand awareness. Obviously, most of our countries, almost the entire population knows us, and if they haven't used us before, then this is obviously a good chance for them to try out the service. So we think that's related to that.If you look at these restaurants, I think the question was whether these -- whether we expect these customers to stick around and whether we expect the restaurants to stick around? Yes, we do. There's naturally a couple of restaurants that only do this to remain alive. That's a certain small group. But if you look at the composition of the applicants for our website. There's also quite a lot of marketplace restaurants coming in. Because you can assume, for instance, that we have a lot of pure marketplace restaurants, so you can't dine-in or you can't pick up. But a lot of these delivery restaurants they at least do pick up. Now that falls away for most of the countries, not because it's prohibited like, for instance, it was in Austria, but because people simply don't do it. So that's something that we see changing. And if they have a small sit-down arrangement, then obviously, they don't revenue from that as well, and they are more inclined to sign up with us. And obviously, for us, it has been quite interesting to see. We have quite a large sales force. We put in quite a lot of effort to get restaurants online that we got so many in just a couple of weeks. But we do expect most of them to stay. Obviously, people experimenting with food delivery, like stake restaurants, et cetera, some products are not suited to be delivered, and we don't expect those restaurants to stick around after the crisis. But for the most part, we're quite confident that we'll keep them.

[Operator]

Next question is from Mr. Andrew Ross from Barclays.

[Andrew Geoffrey Ross, Research Analyst]

Just 3 questions from me. First one on the cyberattack. Was that just in Germany? Or was it across all the platforms? And I guess as a follow-up, kind of maybe if you could help us with what you're doing to make sure that, that doesn't happen again. Second question on the TV spend. Clearly, the broadcast is you're seeing a lot of price deflation right now. Wondering if there's any benefits that might come through for you guys, either in the near term or later in the year on how much having spent on TV has got the same level of engagement? And then third question is a kind of bigger picture. It sounds like your Scoober business clearly is losing share to the marketplace. Do you think that, that trend is observable across Europe where own-delivery operators are suffering share losses as a result of this?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Thank you. Regarding that cyberattack that was quite a significant one. It lasted for a couple of days. It affected us severely for one day. And since we only have one platform, it's affected the whole platform, unfortunately, where actually a couple of [ bribery means ] involved as well. So it wasn't the greatest week of our lives, let's call it that. Obviously, we've taken our measures. But you should not think that in a normal situation, we do not have DDoS attacks. We just don't go offline because of them, and we have a lot of protection in place. And these particular cybercriminals, they found the weak spots, and we've plugged the hose during that day. I'm quite proud of the IT department for doing that because that wasn't easy.Regarding the price inflation for marketing, actually, I think a lot of the TV stations have not changed their pricing. And you should -- also because of the fact that we are already quite a large advertiser in most of our countries, so we would just be increasing the frequency of our advertisements. And given that's the brand awareness in most of our countries is already almost close to the entire population, we don't think that, that has a particular effect on us during the crisis. So we're trying to keep marketing at the levels that we're at and actually slightly below it because we want to have some buffer during these times as well.Regarding Scoober and your question around -- on delivery, maybe that's for Jörg.

[Jorg Gerbig, COO & Member of the Management Board]

Yes. I mean as we have generally discussed before, the Scoober restaurants are suffering more because they're mainly -- some of their revenue is from in-restaurant dining. So therefore, we saw, when there was a drop in orders, that specifically those Scoober restaurants close more than those marketplace restaurants, which also then resulted in a lower shelf Scoober for us. So it's been hard to predict where that ends up. But we also think that this was basically across Europe the case because those Scoober restaurants have a higher share of in-restaurant dining. So overall, we think across Europe, the share of Scoober was suffering as the share of logistics was suffering as compared to the share of marketplace.And also, interestingly, a lot of the new applicants for our website they were actually providing deliveries themselves because they have quite some stuff being available at the moment. So almost surprisingly to us at the beginning, a lot of those restaurants set up their own delivery business, so we could just list them without offering logistics. It's a bit hard to say how that plays out in the future. It also depends on how many of those Scoober restaurants are surviving because if the market is opening up again, I hope, and we guess that a lot of those restaurants survive and will go back to actually providing the service. But at the moment, we definitely saw that Scoober or logistics was losing share towards marketplace.

[Operator]

Next question is from Mr. Andrew Gwynn from Exane BNP.

[Andrew Philip Gwynn, Senior Food Researcher & Analyst of Food Retail]

Two questions, if I can. So I mean you mentioned obviously that you've dialed down the commission rates in a few cases. So I'm just wondering how we should think about perhaps a take rate in Q1 and Q2. Is it particularly materially impacted? The second is, I just come back actually to the new user number. And presumably, what we've seen is a significant step-up in order frequency. I'm just wondering if you could comment on -- or any kind of numbers you might be able to give on active users. And the last one is a bit cheeky. It's going to be 3, but just one last question. I think Grubhub in the U.S. suggested something like 30% of the supply base may never reopen as a result of COVID. It seems a bit early to speculate. But I just wonder if you have any thoughts. You touched on it just then, but just your thoughts on the kind of longer-term impact.

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Thank you, Andrew. Regarding your question around our commission, we have not dialed down our commission. We have though dialed down the pickup commission, which is a very small part of our business. We have done that because you were just alluding to those regular restaurants, restaurants with dining possibilities. Those restaurants were impacted severely and they are also sometimes out of our Scoober footprint. So for them to get orders using our apps and using our payment methods could actually alleviate their issues because you now see a lot of regular restaurants trying to only do pick up without a decent website, without a decent app, without payment options. Now obviously, if you want a counterless pickup, you would have to pay before you actually pick up the food. If you don't -- if you can't provide a technical solution to that, then you can't really open in these days because people are used to using apps and so on. So we are providing that service, as a courtesy, to those restaurants. It is not a big part of our business, and we haven't dialed down the commission on our regular product. What we have done though is recognize that we have different groups of restaurants. The biggest share has no big impact of this corona crisis because they are delivery restaurants or at least they are, for the most part, delivery restaurants.The smaller group, and that's particularly the Scoober group, but it's also sometimes restaurants in smaller towns that have a delivery service on the side, we try to support by having them not pay the commission for the time being. But this is a smaller group in our customer base. And it also needs to be said that, for them, that doesn't really help too much because if we are only a very small part of their revenues, then obviously, us not asking for payments it might help, but it doesn't -- if that's only 10% of your revenue, it doesn't give you back 90% of your revenue. So you would still be in trouble from that end.And to connect that to your last question around Grubhub. Grubhub has a very high share of logistics. So they are very dependent on dine-in restaurants. Now dine-in restaurants, as you also said, they might have 100% dine-in revenue. And then on top of that, they might have several delivery services, which may be get them 10% or 20% additional revenue on top of the 100% but they have lost 100%. And for our -- it depends a little bit on the country because in some countries, actually, you need to be closed to get government aid. Well, then you're not going to stay open for delivery. And also a lot of these restaurants, they were struggling quite a bit because of what happened there. Some of them actually, we know, are preparing to reopen because they see the possibility now to only do delivery. Because we assume that it's going to take quite some time in all the countries to reopen restaurants because there are gatherings of people. So they have to do something, obviously. Those restaurants are actually in quite a lot of trouble, and we see a lot of restaurants go into insolvency. But then again, those are typically not our core customers of our website. But I do believe the claim that Grubhub is making around that.Then the question around new users. Well, new users, for us, always behave in the same way. It's very difficult, for us, to predict what customers are now going to do. If you look at the composition of our customers, we've lost, obviously, most of the office orders. So if you are looking at our graph and the pickup again in our order numbers, you have to be conscious of the fact that this does not include office orders because there are none. So that has a -- that is an interesting development. So that must mean that people at home are ordering more frequently, theoretically. But obviously, we can't say on just a couple of weeks, we would have to look at that after a year. Whether they will continue to do so after the crisis, we do not know. We assume it will have a positive impact on order frequency, but it will probably not be at the same rate that they're currently doing that.Obviously, of course, after the crisis, you will see office orders come back in and you will see a lot more restaurants being online because we've gained thousands of restaurants, but we have also lost thousands of restaurants at the same time. And while we also believe that a lot of those might not survive this crisis, a lot of them will, and they will get back online on our website. And some of them, as I said, are already preparing to do so because they do know that we have the volume to support them.

[Operator]

Next question is from Mr. Rob Joyce from Goldman Sachs.

[Robert Joyce, Equity Analyst]

I've got 3. So when you say order growth is now back to normal, does this mean you exited the quarter ex-10bis, broadly the same growth rate you had in the fourth quarter of 2019? First one. Second one, could you quantify how many restaurants you actually added in the quarter? And maybe give us that versus the fourth quarter of 2019 as a reference point? And then just give us an idea of what was the split there in marketplace and Scoober was on that? And then finally, you mentioned EBITDA. I mean if we continue on the current trends, do you expect to be EBITDA positive in the first half of 2020?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Thanks, Rob. Second question goes to Jörg. First question to Brent. If you look at our order development, if you also follow the graph that we've provided, you can see that at least in Holland and Germany, we're kind of back on the trend line that we already had when you pick Q4, Q1, it's not so relevant to us. You also see an acceleration. We don't know whether that will further continue. That's very difficult for us to say. But at least we see that we're currently on the trend line. And also for us, we are happy that we are at this point. Obviously, given that most companies around the globe have a very difficult situation. We would be quite excited if this is it. We're going to be more excited, of course, if the trend continues to go up. But for now, it's -- you could say we're following the same trend as in Q4 or in the first 2 months of Q1. Jörg, can you handle the other question?

[Jorg Gerbig, COO & Member of the Management Board]

I mean -- on the restaurant question?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Yes.

[Jorg Gerbig, COO & Member of the Management Board]

On the restaurant side, I mean, just to give you a bit of perspective since corona started, we activated more than 3,000 restaurants, which is multiple times the amount of restaurants we usually activate in such a period of time. So we also had to shift other resources from the company to actually make sure we're getting these restaurants online as fast as possible because we -- to get this point earlier, I think one of the most important support we can give to the restaurants is really getting them live as fast as possible and providing them as smooth of a service as possible. So we actually came up with the process to really accelerate the going live process. And therefore, as I mentioned, we activated more than 3,000 restaurants already and have quite some more in the pipeline.In terms of restaurants, we got live, and that's -- like I said, multiple times, the amount of restaurants usually get live within the quarter, we're speaking about 2 to 3x the amount of restaurants depending on the country, roughly speaking. But at the same time, we also had restaurants going temporarily off-line. So that impact is kind of also like affecting those online restaurant numbers. So I hope that gives you bit of perspective on that.

[Robert Joyce, Equity Analyst]

Just a split with the most Scoober or more marketplace, you added?

[Jorg Gerbig, COO & Member of the Management Board]

Yes. I mean it's more marketplace restaurants we're adding at the moment. Because like I mentioned before, interestingly, a lot of those restaurants, who you would usually think are more -- yes, more willing to use just our logistics on top. And they actually have now free capacity because all the waiters have basically nothing to do at the moment. So they say, okay, then I'll set up my delivery myself, and I don't need your logistics because then I'm also paying less on the margin side. And so they're setting up the delivery themselves.

[Robert Joyce, Equity Analyst]

Okay. And so on the EBITDA?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Yes. Brent?

[Brent Adriaan Wissink, CFO & Member of Management Board]

Yes. Well, from -- as we announced last year that we became EBITDA positive. That trend is expected to continue, in particular, until February that was continuing, and we do not expect that this hiccup, what we experienced in March to all of a sudden deviated from that. So yes, I can confirm that we will remain EBITDA positive, and we expect it to be so in the first half. What -- maybe it's good to add that we still are investing quite significantly. For example, even in these days, we are strengthening our customer services department and also our sales and Scoober because we believe it's -- we have to invest in that. But even with these investments, we're still expecting EBITDA to be positive in the first half, which is a continuation of the trend that we've announced before.

[Operator]

The next question is from Mr. Hubert Jeaneau from UBS.

[Hubert Jeaneau, Director and Research Analyst]

So first one, just wanted to hear your thoughts on the potential second order effect, so kind of how the business would behave in a recession. And if you had any kind of earnings from '08, '09 on kind of consumer behavior and whether they consider Takeaway as more of a luxury to cut down or something that's actually relatively sticky? The second one is on marketing spend and with the postponement of the football cup, just wondering if you're expecting to dial back a little bit on marketing or if it's pretty much business as usual from that perspective? Last one on the -- I mean, you talked about quite a bit already about the restaurant supply. But just wondering, are restaurants still kind of closing down -- deciding to close? Or you're seeing more restaurants deciding to come back than kind of offsetting that?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Regarding questions around recessions, we don't believe we're very sensitive to that because most of what we're doing is shifting people online from a phone order essentially. That have being said, of course, the higher your penetration gets in a country, the more sensitive you become to that because if you -- obviously, if you have 5% of the orders in the country and 95% is by phone, growing into the 95%, always provides you a lot of growth. But obviously, if you already have 95% and there's 5% left, you're going to be more recession vulnerable. I do not believe, though, that people, at least not in the countries in which we're doing business perceive us as a luxury thing because also, you see that the order frequency is quite high. So it's not something that -- it's not a washing machine or a car. So in that sense, I don't believe we're going to be too much affected by any recession. Now this is a very particular one. Obviously, it's everybody -- as everybody understands. But for us, the challenge in this crisis is mostly around how do we operate and how do we keep people safe, et cetera. That's very complicated. And yes, fortunately, we run a centrally ran organization, so we don't have to fly to all these countries to figure out how to endorse ourselves. And we've been quite used to video conferencing throughout the company.Regarding the question around restaurant supply. Sorry, can you remind me what that was?

[Hubert Jeaneau, Director and Research Analyst]

Yes. On recent study, just wondering if -- I mean, you saw, obviously, a first wave of temporary closures. Just wondering if you're still seeing more of that or if this is less of an impact?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Well, look, there's a couple of restaurants that try delivery. And it might not work out for them or they might have different expectancies around the outcome. A lot of the restaurants on our network get a lot of orders because they've been on our network for the last, let's say, 5 years. And the longer you are on our website, the more that you would get. For some restaurants and you can think of the QSRs, you would get a lot of orders via our website because everybody knows the QSRs and everybody knows us. So they would receive a lot of orders. So it could be quite beneficial for those type of restaurants. If you run a small restaurant though that people happen to pass by, and you have no brand awareness, then obviously, it becomes a lot more difficult. And those restaurants, in particular, might then close after having tried it. We are not aware of a lot of those things happening. We do see a lot of people that are actually quite satisfied with this because they can at least have a core team still operating from the restaurant. And I think what's important, and I don't think that's particular to food delivery, but I think what's important in this type of crisis is to at least retain your business and retain your position because, obviously, the world's going to be very different after this crisis goes away. So it's always smart, of course, to keep your restaurant open and to keep your customers satisfied because otherwise, they will not be able to find you after the crisis. And that said, we don't expect restaurants to open anytime soon. So it's going to have an impact.You also asked about marketing spend. We're constantly evaluating our marketing efforts. You can understand that, for instance, billboarding is not very effective nowadays with no people on the streets. So we're looking at all that, but we also have long-term commitments. We can't just switch off, for instance, TV spends, if we would want to do it. We don't want to do that, but that's difficult. And the Google spend is very much related to how fast we grow and how many orders we process. So obviously, if all of a sudden, we have less orders also, we would have less costs. So that's the benefit to that. Now we will try to, of course, advertise in a way that is more befitting the current situation. We're quite conservative in terms of planning of what we do with marketing. So we won't all of a sudden increase marketing tremendously. But you could think about us doing a couple of things that make more sense in this environment.

[Operator]

Next question is from Mr. Georgios Pilakoutas from Numis.

[Georgios Alexandre Bela Pilakoutas, Analyst]

A couple of quick ones, please. First on kind of the digital cost per order, whether you're seeing any change there kind of particularly in recent weeks as the company dialed back there and kind of online ad spend? And then second one, could you just give us an update on the proportion of office orders in the Netherlands and Germany?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Your question around CPO. We haven't come around to it. I would assume there's a little less pressure on it, a little less, but not a lot less. Because obviously, we would compete mostly with other delivery services. For instance, also pizza chains and all of that, they would still be operating. So I don't think there's a lot of impact there. What we have seen is a lot more volume to our websites, but that's also logical because a lot of people are sitting at home being quite bored. And probably refreshing our website quite a lot before there was nothing with relation to that. So we have higher volumes, not to say, than a higher conversion based on that volume.Regarding the office share, that's relatively limited across, for instance, Holland and Germany. But obviously, if the offices are closed, there is no lunch ordering and there's no overtime ordering. And that does have an impact. I don't -- it's difficult for me to make any assessment of what that would be because we don't particularly look at it. I mean we get orders and we could look at people filling out company names and all that. But we don't ask people whether they are in a company or not. So if they don't fill out that company name, we don't know about it. Obviously, we're also still rolling out Takeaway Pay, and that's more complicated in this environment that all the offices aren't. It doesn't mean we don't have any business in Takeaway Pay because it's quite a lot of companies that do want to provide lunch or dinner to their staff even while they're sitting at home. And obviously, we're quite good at that as a company, and we're quite flexible. It doesn't matter, of course, that people are in a different location to us. But there's less selection on that, and we can see that, in particular, in Israel.

[Operator]

Next question is from Mr. Wim Gille of ABN AMRO.

[Wim Gille, Head of Research & Equity Research Analyst]

A few ones from my side. First of all, on the pickup side. Can you give us a bit of a feeling on the percentage of orders that's related to pick up and whether all of these orders are included in the numbers that you provide in the press release, given that there are 0 revenues on them. So that might impact the average revenue per order in modeling? Secondly, you issued a press release, when the issue emerged or when the COVID stress began in the Netherlands, basically stating that about 20% of your restaurants would be eligible for deferred payment. We're now a few weeks into the crisis. So how do you see that actually developing? Is that in line with previous expectations? Or is it a little bit more or less? And how do you manage the credit risk associated to this debt line? And lastly, we see that the number of the daily average uses on apps like App Annie is going through the roof in many regions. Can you give us a bit of feeling on why you think this is? Is this order frequencies going up or is something else going on?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Thank you. Regarding your question about pickup. Pickup is extremely small in Takeaway, and you should see this as a gesture to restaurants that are in trouble. We are not large in pickup, but there's a lot of restaurants without technical capabilities to receive pickup orders that need to pick up orders in order to stay alive. And there's quite a lot of those examples, right? I mean if there's quite a lot of these local restaurants that don't want to do any delivery, but that do ask for support from the local community and people need to pick up food. And they will come up with things like, yes, you have to send us an email, et cetera, et cetera. Well, obviously, that's not the seamless type of experience that you want as a customer. And we do have that, and we can easily provide that to those restaurants. So I suggested to them. I would be quite surprised if you can measure that in our results. Maybe you can, probably you can't.Regarding the deferred payment, we made an assessment that about 20% of the restaurants could consider to do that. But Brent, I think you have got the last figures on that.

[Brent Adriaan Wissink, CFO & Member of Management Board]

Yes. Well, in the first week, there were a couple of hundreds who applied for that deferred payment option. So the interest was limited. It's still open. People can still apply, but we believe it's certainly less than the 20%. And with respect to the credit risk, it's limited. This deferred -- at some point in time, we will start invoicing the deferred payment. And -- well, unless restaurants would not go belly up, then we will settle it then with the order volume -- the orders that we provide to them. So we consider the credit risk as limited.

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Then your last question around App Annie, yes, probably people are at home and they're not working. That's -- they're downloading apps apparently, but I don't think that -- it's very difficult for us to make a connection to, for instance, new users. We do see that we're getting new users because of this. But whether that most of Annie users don't come through apps and also, of course, there's quite a lot of ways in which you can increase the amount of app downloads. I don't particularly have information on those, but we'll look at it.

[Brent Adriaan Wissink, CFO & Member of Management Board]

Yes. And your first question, I would not include it in our modeling. I have to admit that we do not even do that in our -- when we model it. We know the volume, but it's so immaterial that when it becomes material, we will not -- we will let you know.

[Wim Gille, Head of Research & Equity Research Analyst]

Very good. And then I've got 2 follow-up questions. Obviously, you have to sign up a lot of new restaurants. And that requires merchandise and order books. While the supply line from China early in the year were quite disrupted, so do you have sufficient merchandise, et cetera, to actually sign these companies up and have your supply lines being restored by now?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

I think Jörg, you say some...

[Jorg Gerbig, COO & Member of the Management Board]

Sure. Yes. When corona started in China, we actually indeed had a bit of a backlog on the supply line, but we still had printers in stock because the people there in China sent their stuff for a long vacation for another month. But now production is back on full speed, and we don't face any issues on the supply side.

[Operator]

Next question is from Silvia Cuneo from Deutsche Bank.

[Silvia Cuneo, Research Analyst]

And for the first one, you already mentioned the change in demographical users. And is there anything else you can say on the impact of profit to the demand side? Just wondering if the marked volume was impacted by the lower restaurant ordering? Or will some users ordering less because they could be worried of the potential spread of the virus? And then secondly, can you share what is the percentage of restaurants that are Takeaway only? And how much of the orders are they responsible for? And then maybe a final one on the outlook for the business overall. As the B2B business is still being impacted, should we expect a deceleration in group quarter growth in Q2 from the Q1 levels? And the rest of the B2C business goes back to normal that should not be accelerating, especially as some of these covered restaurants might still be closed.

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Thank you, Silvia. Regarding the fear of the spread of the virus, well, I think it's important to note that what governments are doing -- they're trying to limit the spread of the virus. They're not trying to stop it. They will tell people that they're trying to stop it, but I don't think that's actually possible. So they're limiting the spread just like what we are doing in the company is limiting the spread. Is it completely impossible to spread the virus via delivery? I don't think so, but the same would apply to supermarkets. Obviously, everything in the supermarket has been handled by multiple persons and there's a lot of people in the supermarket. So I think if you compare the 2, probably ordering food delivery is the safer option for you. Does it give you a full guarantee? No, it doesn't. But then again, if you look -- if you listen, for instance, to what Angela Merkel has said, 70% of the population will get the virus. And that's very unfortunate, but that's the way it is. And the only thing I think what we can do with society is try to limit the acceleration in the spread of the virus so that there are enough hospital beds around for the people that get impacted by it.Regarding the question around Takeaway only, I think it's a little bit of a difficult thing for us to look at. We know that the non-Scoober bit, so the 93% of our orders is probably for the lion's share of their revenue dependence on delivery. It doesn't necessarily hold true for all the restaurants. If you look at -- take a restaurant in a small town, they would do pick up. They will do a lot of delivery, and maybe they have a couple of bar stools to sit and chat to the owner. But that's kind of the variance in the 93%. In the 7% though, we don't assume that those restaurants are dependent on delivery at all. They are dependent on dining. And this is also why you see so many of them close, including QSRs. There's a lot of QSRs, McDonald's in a couple of countries is closed. There's a lot of those bigger chains closing down completely. Simply because for them, if they lose the 100% yes, they're not going to be happy with an additional 10% because they can't sustain that business, and it's probably cheaper and easier for them to send everybody home.Regarding that question around Q2, yes, business-to-business is impacted. And I -- unless you know more than I do, I don't see a lot of people returning to offices, at least not for this month. We might see something like that in 1 or 2 months, but not currently. You have to realize, though, that the consumer demand must be much higher because it compensates for the lack of business orders. In the meantime, of course, we're getting more new customers, we're getting more restaurants online. So theoretically, if all this goes away, we should benefit from the additional customers and the additional restaurants.We can't give you any guarantees for Q2. We are quite hopeful because you can see that at the beginning of April, the situation in our larger countries is back to normal. But as we said, the mix of the users, the mix of the restaurant is completely different than what it was before this all started. Now the good news is that, frankly, that doesn't affect our order numbers too much. But yes, I mean, based on this, it's very difficult for us to say what will happen. We are quite happy that it happened in this way.

[Operator]

Next question is from Mr. Andrew Porteous, HSBC.

[Andrew Ian Porteous, Analyst, European Retail]

So most of might have been answered, but a couple of follow-ups, if I could. Just wondering about the service. Have you seen any impacts in terms of delivery times and things like that? I mean has demand effectively outstrip supply at all? And have you seen any changes there? And then a second one around sort of customer behavior. I appreciate it's early in the sort of current crisis. But have you seen any sort of changes in terms of what meal occasions you're servicing? Are you doing more lunches than you were before? Or is it generally as it was pre-crisis?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

Thanks for those questions. Regarding delivery times, actually, they are going up because we have less Scoober orders, so we have more capacity currently on Scoober. That having said, we have quite a lot of restaurants and restaurant chains coming into Scoober, so that will probably reduce the capacity in Scoober once again. We do, of course, also have a couple of challenges with people not going to hubs anymore or part of the staff not going to hubs. But actually, the delivery times currently are slightly up and not down because there's simply less demand than supply on the Scoober end. Sorry, your second question was?

[Andrew Ian Porteous, Analyst, European Retail]

Just around order -- meal occasions that people are ordering for. Are you seeing people order for more lunches as they're working from home or is it generally as before?

[Jitse Groen, Founder, Chairman of the Management Board & CEO]

No, there's less lunches because the offices are closed. So there will be less lunches.

[Operator]

Ladies and gentlemen, this concludes Takeaway.com results call. You may now disconnect your lines. Thank you for attending, and I wish you all a very nice day.