Adevinta ASA

OSE:ADE

Earnings Call Transcript 2022-Q2

[Operator]

Good morning. This is the conference operator. Welcome, everyone, to Adevinta's Q2 2022 Results Presentation. [Operator Instructions]

Mr. Antoine Jouteau, CEO of Adevinta, will host today's conference. Mr. Jouteau, the floor is yours.

[Antoine Jouteau, executive]

Thanks, operator. Good morning, everyone. Welcome, and thank you for joining today's presentation of Q2 results. I'm pleased and proud to be here presenting you with my first set of results becoming CEO just 2 weeks ago.

In the room with me today in Oslo, Uvashni, our CFO; and other Adevinta executive team members are also on the line. I'm very pleased to welcome Ajay Bhatia, the new CEO of mobile, who joined earlier this month. I also wanted to use this opportunity to thank my predecessor, Rolf Erik Ryssdal, for his trust and support over the years. Rolf Erik has served with great distinction as CEO of Adevinta for the past 4 years, and prior to that, was the CEO of Schibsted. I'm sure you will join me in thanking him and wishing him well in his future endeavors.

Together with Uvashni, we'll take you through the presentation. Then Ajay, Gianpa and Zac will join us for the Q&A session.

We are delighted with our performance so far this year. It confirms Adevinta's position as resilient, growing highly profitable leader in the open classified markets. You will note that both our revenue and EBITDA are ahead of market expectations, underlining the strength of our business despite the economic headwinds. I will talk you through our performance in more detail in a moment, but first, I would like to share with you my observation of where Adevinta is today and why I'm so excited about the company's future.

I will not go through the disclaimer, which I invite you to read, and I will start with a short introduction. We are an online classified market leader with the largest return-based platform with an outstanding team. As you can see from our results, we continue to deliver healthy top line growth. We are highly profitable and cash generative with a strong balance sheet. These results also reflect our continuing progress on improving operational execution across the group. These qualities have already enabled us to successfully weather the COVID pandemic. Now both same qualities, coupled with the countercyclical nature of many areas of our business, afford us great resilience at the time of economic uncertainty. They should keep us to grow at pace.

You will recall that we clearly outlined our Growing at Scale strategy at our Capital Markets Day in November last year. There will be no significant changes to this growth strategy under my leadership. The 5 pillars will continue to support all of our decision-making in the months and years ahead. But I will add one important caveat: it relates not so much to what we do as to how we do it.

In all areas of our business, we will be sharpening our operational focus, picking up the momentum of operational improvement and tightening our financial discipline. This will ensure that we have the right structure, the right cost base and the right people to execute that strategy and deliver the results you expect of us.

Now let's turn to the highlights of the quarter. In Q2, we made strong progress in the execution of the key strategic pillars I just mentioned, starting with portfolio optimization and operational efficiency. A significant milestone was achieved with the exit of most transaction services agreements we had with eBay. We can now operate as a unified group. We continue to execute on our strategy for growth businesses, increasing monetization of key Motors and Real Estate verticals and further ramp-up of our transactional services. I will dig into both in the following slides. This resulted in visible improvement of our financial performance despite the weakening macro environment.

Revenue growth accelerated in the quarter, driven by mobile recovery. Core markets grew 10% year-on-year. EBITDA margin increased to 34.9%, benefiting from strict cost management. Cash generation also increased in the quarter, and we continued to optimize our balance sheet structure.

To sum up, we are on track to achieving our financial targets for the year and the long term.

Our portfolio optimization is progressing at pace. We announced the divestment of Australia and South Africa over the summer. We expect to close the transaction by the beginning of Q4, and we will use proceeds to delever.

Moving on to operational performance. I will focus first on traffic, a key indicator in our industry. Given the external factors that affected our KPIs in the couple of years with COVID, the Ukraine war regulatory changes, we thought it would be useful to show our long-term evolution. Both leboncoin and Kleinanzeigen show an impressive performance with visits being more -- being up more than 30% compared to Q1 2019. This demonstrates the strength of both brands. In mobile, also the brand is as strong in its market. It's inevitably impacted by the motor market environment temporarily weaker, but we believe the potential remains intact as we continue to increase our market share.

Now let's dig into our 2 key verticals, starting with Motors. As we have now experienced with more than 1 year, the industry is going through an unprecedented situation that's derived from the global chip supply crisis and has been amplified by the war in Ukraine. This results in the lack of inventory and has direct knock-on effect on the used car market and dealer listing volumes in our marketplaces.

In France, they are down 14% in Q2. In Germany, they are down 19% year-on-year, showing inflection compared to the previous quarters. This is a temporary impact and we continue to believe that this will unwind. In the meantime, we are able to actively mitigate these temporary headwinds through our own initiatives. In both France and Germany, we hold strong #1 positions and we continue to gain market shares.

According to external data, our competitive advantage in mobile is even stronger year-on-year when we compare web visits and app sessions with our main competitors. leboncoin dealers penetration has also increased more than our direct competitor in the quarter.

This is not only the result of our strong brands, but also of our innovation capabilities coupled with a very customer-centric development strategy. Here, you can see only a handful of new products and features that were released during the quarter. For example, the Pack Sérénité in France, which is a peer-to-peer payment and warranty solution of the enhanced filtering capability in Spain.

In Real Estate, our situation is different in France and in Germany, where we hold different market positions. In France, listing were flat year-on-year. We'll continue to improve our monetization. ARPA increased by 16% year-on-year, thanks to the good performance of subscription packages with high added value for professional clients. In Germany, professional listings are up 21% year-on-year, reflecting our gains in market share and increased agent penetration. The number of professional clients increased 17% year-on-year to 8,000. We still have a lot of room to grow here and we are making sure that we will continue to bring further value to agents, ultimately leading to increased monetization as well as illustrated in our next slide.

In leboncoin, we launched a new seller acquisition tool for real estate agents. In Kleinanzeigen, we introduced a new map and new item page. The new website in Spain allowed significant improvement of access to additional services. Again, those are only examples and the ramp-up for the upcoming quarter is very rich.

Moving to the transactional services. We continued to see very strong traction in the adoption of the product. We reached 4 million total transaction in the quarter. More specifically, leboncoin and Kleinanzeigen's number of transactions grew 20% and 139%, respectively, compared to the same period 1 year ago. This is a significant growth opportunity, but it also contributes to the vibrancy of our old platforms. Our scale and growing collaboration between our teams allow us to be more efficient and faster in the time to market of transactional services rollout.

Moving on to advertising. Q2 performance remained challenged by the same headwinds we faced in Q1: lower advertising volume compared to pandemic all-time high level in H1 2021 and a weaker advertising market, in particular, in automotive. Despite these challenges, we are seeing some pockets of resilience, in particular, in local advertising in Spain and in France. We continued to invest in our 1P products to transform our advertising business to ensure sustainability revenue growth and reduce reliance on third-party advertising.

To highlight a few, one area of investment is 1P product listing ads, which are native ads that complement our consumer inventory, preventing customers -- providing customers a comprehensive selection to choose from. Our new 1P product listing ad proposition targeting retailers in Kleinanzeigen is scaling well, and we are improving our 1P product listing ad proposition in Benelux by offering value-based pricing and functionality to simplify the way advertisers manage their budgets.

I will now hand over to Uvashni for the financial performance section.

[Uvashni Raman, executive]

Thanks, Antoine, and good morning, everyone. As Antoine mentioned, our financial performance for the quarter was underpinned by acceleration in revenue growth, mainly driven by mobile, which was back to positive growth in the quarter. We also saw stricter control around costs and management of costs as we navigate the current uncertain markets.

Compared to last year, revenues grew 8% to reach EUR 417 million. Just to remind you, our combined numbers include only our continued operations. Operations in Australia and South Africa are not included in these numbers as they are accounted for as discontinued operations. Further, to ensure numbers are comparable to last year, we also needed to restate revenues for Q1 2021 to Q2 2022 to exclude those operations that we divested, including Shpock, InfoJobs and Kufar.

This leads us to a restated Q2 2021 revenues of EUR 385 million. Our Classifieds revenue saw growth of 11% year-on-year, supported by double-digit growth in Jobs, Motors while Real Estate saw very high single-digit growth. Transactional services saw revenues up 28% year-on-year, driven by continued growth in the number of customer transactions. Our advertising revenues, however, declined year-on-year reflecting the lower OEM spend and the weaker macro environment. This happened especially in our noncore markets, which was essentially driven by Canada, which was down 22% year-on-year on advertising revenues. More importantly, though, our core markets posted a growth rate of 10% in the quarter.

Turning to EBITDA, excluding the impact of discontinued operations, this increased 8% year-on-year. This was the result of the positive top line evolution, lower marketing investments due to the significant impacts we saw last year in marketing campaigns. We also looked at management of spend levels again in the quarter.

This was partly offset by an anticipated increase in personnel costs in 2 areas: firstly, resources focused to fuel product development and new business models, for example, online buying and selling and transactional services; and secondly, for the buildup of global capabilities as we prepare to exit the transitional services agreement from eBay. These, as Antoine mentioned, we saw the exit in July 2022.

We also saw high external services costs, primarily in mobile and Kleinanzeigen. This evolution related to, firstly, the deliberate use of variable workforce capacity while we structure and finalize our new operating model. And secondly, as we ramped up transactional services, we outsourced our customer support and operations, and therefore, you saw the corresponding increase in external services. Direct costs on transactional services also increased, which includes delivery and payments, as we ramped up these services and we saw adoption rates grow.

EBITDA reached EUR 146 million in the quarter, representing a 34.9% EBITDA margin up...

[Operator]

Ladies and gentlemen, please hold the line. The conference will resume shortly. [Technical Difficulty]

[Uvashni Raman, executive]

Hello, everyone. We are back. Sorry, the call appeared to have been disconnected. We've had some technical issues. I think I was on Slide 18 when the call dropped. So I'll start again from that slide and then continue again.

And that is turning to our EBITDA performance for the quarter. So excluding discontinued operations, EBITDA increased 8% year-on-year. This was the result of the positive top line evolution and lower marketing investments due to significant market campaigns in the second quarter of 2021 and management of spend levels. This was partly offset by an anticipated controlled increase in personnel costs in 2 areas. Firstly, resources focused to fuel product development and new business models. For example, online buying and selling and all transactional services. And secondly, on the buildup of global capabilities ahead of eBay's transitional services exit that took place in July 2022.

We also saw high external services costs in the period, notably at mobile and Kleinanzeigen. This evolution related to, one, the deliberate use of variable workforce capacity whilst we structured and finalized our new operating models; and secondly, as we ramp up on our transactional services, we outsourced our customer support and operations, and therefore, you see the corresponding increase in these costs. Direct costs from transactional services, which is delivering payments, also increased in the quarter in line with adoption and ramp-up of these services and the revenue growth.

EBITDA reached EUR 146 million in the quarter, representing a 34.9% EBITDA margin, up 30 basis points compared to Q2 2021 and 260 basis points compared to Q1 2022. Included then, of course, is the EUR 7 million that we have in share-based compensation. This takes us to an underlying EBITDA of EUR 153 million and an underlying EBITDA margin of 36.6%. We showed good performance across all of our markets with France being the standard.

Moving on to France. Reported revenues in France grew 8% in the second quarter of 2022. Online Classifieds revenues grew 10% year-on-year, mainly driven by Real Estate and Motors, which posted double-digit growth in revenues. Growth in Real Estate was the result of the continued good performance of subscription packages with high added value for professional clients. This led to positive ARPA evolution of 16% year-on-year. Motors revenue growth in the quarter was driven by the 20% ARPD increase, which was more than offsetting the decline in professional volumes. Job revenues were down year-on-year due to lower listing fees despite a steady performance of the subscription packages. Advertising revenues were flat compared to last year. Reduced activity from media agencies and OEMs were offset by good performance in local advertising and sponsored links. Revenues from all transactional services were up 16% year-on-year. Consumer Goods volume growth was 20%. This was partially offset by some discounting campaigns on shipping fees, which took place in June to drive further adoption.

EBITDA improved 21% compared to the second quarter of 2021, driven by the positive top line evolution and lower costs, including marketing, where we saw a 45% decline year-on-year. In the second quarter of 2021, we saw the strong marketing investment to celebrate the 15-year anniversary of leboncoin and to promote transactional services.

These lower costs saw a part offset where we increased personnel and IT costs in the quarter as we continued to invest in further product development, albeit at a slower pace.

Transactional costs increased in the period, driven by the higher volumes and by promotional campaigns, which were held in June. This was partly offset by some contractual conditions we have with our suppliers that are more favorable.

EBITDA margin increased 5.4 percentage points year-on-year chronically.

Now moving on to mobile. Revenues in mobile increased by 11% in the quarter. Online Classified revenues were up 15% year-on-year, mostly driven by the new pricing adjustments implemented in April 2022, which included a dealer price increase and a car value factor. This resulted in a 19% average price increase, which was additional to the 14% listing price increase implemented in August 2021. The combined effect of these 2 successful price increases more than offset the year-on-year negative impact in dealer listings, which was down 19% year-on-year. Revenue from private sellers grew compared to the second quarter of 2021. Advertising revenues declined by 15%, impacted by the reduced level of OEM advertising spend.

EBITDA was broadly in line in the second quarter. The positive top line evolution was offset by an increase in external services fees and internal resources to accelerate our investment in product and technology and on our operational teams in order to support new business initiatives such as online buying and selling, leasing and to prepare for business for the pricing and packaging shift. Marketing expenses also increased in the quarter, up 43% year-on-year, where 2021 saw reduced spend in the COVID context. EBITDA margin contracted 7 percentage points year-on-year, but was marginally in line with Q1 2022.

Moving on to our European Markets. Revenues were up 9% in the second quarter and led by strong performance in eBay Kleinanzeigen, Spain and Italy. Online Classifieds were up 13%, driven by growth in our verticals, especially Consumer Goods and Jobs. Advertising revenues were down 3%, mostly due to the lower traffic compared to the same period last year driven by the context of COVID. Transactional revenues continued to see momentum and more than doubled in the period compared to last year.

EBITDA improved 7% compared to the second quarter of 2021. The top line evolution was partly offset by an increase in personnel costs and external severances as we continued to invest in product development, albeit at a measured and targeted level to support revenue growth in the short term and as well as improvements in our sales and customer support in line with the growth of our transactional services. Transactional costs increased in line with the adoption of the services, while marketing costs reduced 3% where we saw most of that contribution come from lower spend in Italy. EBITDA margin contracted 0.7 percentage point year-on-year.

Now to give you more insight in terms of our core markets within Europe, eBay Kleinanzeigen's revenues grew 12% in the period. This was driven primarily by the momentum in all verticals, Jobs and Consumer Goods being the strongest, and a strong performance from small and medium businesses, which continue to gain market share in Real Estate -- and we continued to gain market share in Real Estate. This evolution was partly offset by a decline in advertising behind a weaker global market environment and higher comps in 2021.

It's important here to mention that advertising performance in Kleinanzeigen was actually much stronger than the overall German market where online marketing spend in the country decreased as much as 8% year-on-year. Transactional revenue doubled in the period supported by the recent launch of shipping and payments propositions. In Spain, revenues grew 12% in the period and reached EUR 54 million. This was driven by strong performance in online Classifieds, up 13% year-on-year and a recovery in Jobs vertical and a solid revenue growth in revenue -- in the Real Estate vertical. This was fueled by new products and packages driving ARPU growth. Motors and Consumer Goods also grew in the period. Advertising revenues were up 7% year-on-year, benefiting from our key account activities. Transactional revenues continued to ramp up as well.

The Benelux was flat year-on-year compared to the second quarter of 2021 at EUR 38 million. Online Classified revenues were flat year-on-year, but we did see lower advertising revenues due to traffic softness, which was partly offset in transactional revenues.

In Italy, revenues grew 14%, mainly driven by double-digit growth in Jobs and Motors and the continued strong momentum of transactional services.

Moving on to International Markets. The International Markets revenues were down 8% year-on-year, driven by contraction of advertising revenues, mainly in Canada down 22% and a slight contraction in online Classifieds revenues down 1%. EBITDA consequentially was down 18% compared to the second quarter of 2021. This was partly mitigated by a reduction of marketing spend of 34% in the quarter. We saw an EBITDA margin contraction of 3.2 percentage points year-on-year chronically.

In Brazil, we saw double-digit growth in our business segments, up 16% in local currency reaching EUR 40 million. Revenue growth was driven by the continued expansion of the triple bundle strategy across Real Estate, by growth in both private dealers and in our Motor dealers and a high liquidity and conversion in Consumer Goods. Transactional revenues tripled in the period. Advertising revenues, on the other hand, was slightly down impacted by a very weak market.

EBITDA was down EUR 3 million compared to last year. This evolution was led by investment in product and tech due to transactional services. We're seeing high inflation in salaries in Brazil with the current environment. And we did have increasing marketing efforts, especially in Grupo ZAP, where we did position branding quite differently this year and then growing transactional costs, of course. EBITDA margin, excluding the management long-term incentives, was up 9% in the quarter -- or was 9% in the quarter.

The next slide talks about the segment we call Other and Headquarters, which comprises Adevinta's costs for the headquarters and product and -- central product and technology costs. The Other and Headquarters EBITDA decreased by EUR 5 million year-on-year to EUR 47 million. The evolution was driven by an increase in headquarter costs to EUR 19 million and that was, as we've mentioned before, in the context of the eCG integration and the take on services from eBay and then, of course, some higher share-based compensation. The slight increase in central product and tech costs related to mainly IT and licensing costs.

This was anticipated -- these costs were anticipated in terms of the implementation of operating models, where we will foresee operational efficiencies and acceleration in value creation as we move into further implementation of our operating models. As a percentage of revenue, though, HQ costs remained flat year-on-year.

If we think about and talk about our integration at the moment, our integration road map and economies of scale and synergies, the main achievements in this quarter were the TSA exits or the transitional services exits, which were implemented much harder than expected. Our key achievement included execution of procurement synergies; the rationalization of our local footprint in overlapping geographies, which is Italy and Mexico; the downsizing of global P&T services due to divested entities and the major system rollouts to implement functional operating models.

Through these initiatives, our targeted run rate synergies of EUR 35 million for the full year 2022 has been confirmed and all initiatives to support this are in execution at the end of the first half. The upcoming major milestones for the next coming quarters are the definition of the product and tech operating model, the cloud migration and data and marketing transformation. These will start delivering synergies in 2023. We remain on track for the EUR 130 million run rate synergies we had announced previously.

If we now move on to other P&L items below EBITDA. On this slide, the Q2 2021 column in the table refers to the IFRS reported numbers corresponding to the legacy Adevinta business prior to the acquisition of eCG. We only provide historical combined figures for our operational segment section.

Depreciation and amortization increased by EUR 57 million year-on-year. This increase is entirely due -- almost entirely due to the amortization of the eCG intangible assets that's related to the purchase price allocation. Other expenses mainly included integration expenses related to the eCG acquisition that remain on track as we had announced previously.

Comparatively, in the second quarter of 2021, other expenses included the loss on the sale of Shpock and acquisition costs and integration costs mainly related to the eCG acquisition.

Net financial items were down EUR 33 million compared to the same period last year. And this was mainly due to the increase in interest expense and amortization of our loan issuance costs related to the eCG acquisition. In the second quarter of 2021, this also included a foreign exchange gain on the loan issued by Adevinta to OLX Brazil.

Tax expense improved by EUR 3 million year-on-year as it benefited from the reversal of deferred tax liabilities related to the amortization of identified intangible assets recognized when we acquired eCG.

Moving on to cash flow on the next slide. We saw strong cash flow generation in the quarter. Some of the more material movements from EBITDA to cash include a positive change in working capital, mainly as a result of the prepayment made in previous quarter. Tax payments were broadly in line with the last quarter. CapEx is essentially the capitalization of development costs and represents circa 5% of our sales in the quarter. I already spoke about the share-based compensation would amount to EUR 7 million. These result in an adjusted net cash flow for the operating activities of EUR 129 million.

We continued our share buyback program in the quarter. The second tranche of 6 million shares, which launched in April 2020 was paused in 2022 prior to our AGM and will continue today.

In the quarter, we managed to repay EUR 75 million of debt in the period in accordance with our financial policy and associated leverage targets. At the end of the quarter, our senior secured leverage ratio was 3.8x.

Considering the current environment, we are actively managing our debt position. By optimizing our debt structure, we will reduce interest rates, therefore, reducing interest cost and focus on deleveraging with the aim of achieving our mid- to long-term target of 2 to 3x.

Moving on to the next slide. Our liquidity remained strong, and our financial total cash position at the end of June was EUR 102 million, and we had undrawn facilities of EUR 450 million.

We also have some ways to go before the maturity of our debt.

With this strong position and good balance between investment and cost control, we believe we have the right ingredients to take advantage of market upswings or have the right levers to pull on the back of further deterioration in market conditions. We are also taking measures to mitigate our FX and interest rate exposure.

Regarding interest rates, we're consistently reducing our floating interest rate exposure. Our floating-to-total debt ratio is now 38% compared to 41% a few quarters ago. Priority is given to floating rate debt reduction when it comes to deleverage.

Regarding exchange rate exposure, we hedge every material transaction and we try to minimize the FX risk by keeping FX cash at an operational minimum and by hedging M&A activity where possible.

In summary, a strong financial performance for Q2, especially in our core markets. Balancing growth with targeted investment in people and resources to ensure we protect our market position and enhance our product delivery to users, whilst we are prudent on resource allocation and spend levels. We also continue to lean in on our synergy execution and delivery. Our focus in the short term remains on derisking our financial position and getting to our leverage target.

I now hand over to Antoine to wrap up with the outlook and conclusion.

[Antoine Jouteau, executive]

Thank you, Uvashni. So in conclusion, you will see that we have not only produced a strong financial performance in a very challenging market. But we are also on track to optimize our portfolio and deliver growth at scale. We will focus on monetizing Motors and Real Estate, filling up transaction services and transforming our advertising business.

Looking ahead, there is an exceptional opportunity for us to create long-term value for all of our stakeholders. We will do it by delivering sustainable, profitable growth built on 3 foundations: our market leadership and the resilience of our business model; disciplined cost management at all levels; improvements to our operating model to leverage scale and drive efficiency, including our product and tech capabilities. This will enable us to deliver on our ambition mid- to long-term targets approximately 15% average annual revenue growth and a 40% to 45% EBITDA margin.

And in the light of our excellent performance in the first half of the year, I can also confirm our targets for full year 2022: low double-digit revenue growth in our core markets and underlying EBITDA in the range of EUR 575 million to EUR 600 million.

Finally, a word about my immediate focus to ensure successful execution. All the levers are in place for us to deliver of our all full year expectations. But I'm a great believer in simplicity, and simplification will be at the heart of my approach. You can expect me to be laser focused on 2 things in particular: operational excellence and strict financial discipline.

I want to be sure that we keep our customer needs and sustainability at the heart of our product and tech development we make.

I also want to be confident that we have the right organization in place to capture as efficiently as possible all the opportunities available to us in the key areas of our business.

I also want to ensure that we can accurately measure our financial performance in a meaningful way, in particular by calibrating the return we make on our investments so that we can sharpen our focus and improve future decisions about how we deploy our capital.

I will, of course, be meeting as many of our external and internal stakeholders as possible in the coming weeks, including many of you on this call, and I will be listening to your thoughts and observation as I refine our plans for the future. I will update you on those plans with our Q3 results.

Thank you. I will open now the Q&A session, and my colleagues from the Adevinta management team and I are available to answer your questions. Operator, please.

[Operator]

[Operator Instructions] The first question is from William Packer with BNP Paribas.

[William Packer, analyst]

Three for me, please. Firstly, could you help us think through the margin trajectory at mobile assuming solid growth in the second half as it looks likely? A little bit surprised to see margins down with double-digit growth. Is that new product investment and the diluted now leasing deal? And can margins improve back towards 60%?

Secondly, in contrast, margins in France are very healthy. Is the way to think about the removal of marketing spend on the generalist transactional model and can you just talk through the sustainability of improvement there?

And then finally, a bit of a wider question. Thanks for all commentary on the outlook for 2022 in the long term. Can you help us think through how front or back end-loaded we should think about the margin improvement? Consensus has 300 basis point improvement in 2023 in a period of product investment and potentially weak macro. Are you comfortable with that?

[Antoine Jouteau, executive]

Thank you, Will. I will start on the mobile margin comment and then I will drop the ball to Uvashni. First, I think mobile has done a very solid quarter, growing on this revenue and that's quite impressive, what they are doing now.

On the margin topic, you're right. I think the softness of the margin is coming from a few topic. One is based on the new leasing impact is impacting their margins. The second thing is their online buying and selling investment is also impacting the margin. And the last is the marketing spend. So that's one thing we are presenting during this Q2 results. Maybe you can give more color on that, but I think it's the key element that explaining mobile's drop.

Regarding the France margin. We made a very solid quarter. It's based on 2 things. One, we have implemented a strong cost discipline during the quarter, plus we are comparing this Q2 with Q2 last year, where we just -- remember, we had our 15th anniversary and we spent more money in marketing during this quarter 1 year ago and we were also discounting a lot the transactional shipping. So it's explaining why the Q2 margin is high. But also, we think that now France is more mature, and depending on the context and depending also of the profile of the quarter and the mix on our revenue, we will try to sustain to keep this margin high.

And regarding your last question about the outlook for this year. We confirm the range we have presented at the beginning of the year. The Q2 was solid, but we are also -- we see that the context and the environment is tough around us. So we prefer to be cautious, but we confirm the range and I think it will be based on our operational excellence and the financial discipline we have implemented.

[William Packer, analyst]

Just to come back on a couple of ones. So firstly, on mobile, how should we think of the trajectory of the margin through the rest of the year? Are those factors, which dragged in Q2 going to impact the second half?

And then my final question was more thinking of 2023. It feels like 2022 is pretty well underpinned with the revenue model and the subscription basis there. There are some quite punchy margins expected for next year. I suppose, how should we think about that or when will you start to communicate on that?

[Antoine Jouteau, executive]

On mobile, maybe Uvashni, you can give some color for the rest of the year.

[Uvashni Raman, executive]

Yes. I mean, I guess what we've -- sorry, can you hear us. We're trying to use our mobile device. Anyway, mobile, I guess, we don't give forward-looking, but what you do see is we are -- we see better comps in the second half of the year, which does have an advantage. But on volume development and demand evolution, we are super cautious because in the current environment, it's the first time we've seen the scenario play out. So for us is we will manage margin based on that development, but we won't do anything further than that at this stage. We don't see anything materially impacting on that.

And then going into 2023, again, we don't provide a forward guidance, and we are going through -- a large portion of that will depend on how the year ends up in the current environment as well. But the expectation is continued development on your top line. And the investment will continue because we will bring new products to market. And at this stage, we are not going to give that guidance. We'll still have a ways to go to work through that.

[Operator]

The next question is from Christopher Johnen with HSBC.

[Christopher Johnen, analyst]

I'd like to do them one by one, if possible. First, maybe a bit of a general outlook question. I mean the current quarter is like 2/3 done now. Has there been any significant development in any of the markets, let's say, compared to the second quarter that you would want to or that you can actually flag to us, that would be interesting.

[Antoine Jouteau, executive]

I will take this one. So what we are seeing now is that we are in the similar situation with Q2. We are very cautious on the advertising market, which, as you know, is crossing some issues with the war context, the inflation and that some advertisers are cautious on the future. So on that category, which is more volatile than the other, we are cautious.

On the rest of the business, it's currently doing on the same trend. Volume on Motors are exactly the similar trend at the Q2. On Real Estate, exactly the same. So globally, the volatility is really on the advertising market that we are analyzing and we have implemented some good strategy on that. As you know, we are switching from 3P to 1P. We push some local advertisers more than national advertisers. So the action plan is working, but we are cautious on this market, and the other one we are quite confident.

[Christopher Johnen, analyst]

Okay. That's clear. And my second question on the investment need. You just briefly touched upon investments continuing in 2023. I guess my question on that would be, if let's say, the big part of some of the, let's say, restructuring need that was required on your part, particularly for the eBay assets will be done, so whether from an absolute level, we should see a material difference next year versus this. Is there any color you can give on that?

[Uvashni Raman, executive]

In terms of the cost below EBITDA on your integration costs, yes, of course, this is the highest impact to the year. But in terms of the investment we're talking about that are above the line is really related to product investment in new products and new business, especially on transactional services, both on Consumer Goods, where you see -- we saw large investments in France previously. That's tapering up a bit. And then now we're seeing investment in eBay Kleinanzeigen. And then we're talking about the investment in mobile around online buying and selling and leasing. Of course, we are doing this in terms of the revenue growth we anticipate in those periods. So that investment will come with revenue growth, albeit at lower margins.

So those 2 categories of investments that we talk about: future businesses, new models and then below the EBITDA investment in the integration of eCG. They will be. And we've talked about it a couple of times now, capital allocation is key on our agenda. And really, we are really prioritizing that investment in order to ensure that we maintain margin, and of course, cash flow generation as well.

[Christopher Johnen, analyst]

Okay. That's very clear. My last question, coming back to the portfolio optimization. I know this is going to be a bit of a tricky one, and correct me if I'm wrong here, but I feel that the current setup, particular together with process on OLX Brazil, is not really value adding. I mean is there any sort of update you can give us on that particular asset? Has there been any sort of discussion with process of late or anything you can say with respect to that relationship?

[Antoine Jouteau, executive]

On that, I'm sorry, I think we cannot comment on that. There is no specific topic at this moment.

[Uvashni Raman, executive]

Yes. I mean, if I can just add, Antoine. No, there have been no talks. We both support the business as we've done in the past. And at this stage, there has been no specific talks around divestments on that business.

[Operator]

The next question is from Andrew Ross with Barclays.

[Andrew Ross, analyst]

Congrats, Antoine and Ajay, on your new roles. I've got three, if that's okay. The first one is just to circle back on Chris' question about Q3. So to be clear, are you saying that advertising on a year-on-year basis has got worse in Q3 than Q2, but everything else is about the same, and therefore, we should assume that the whole growth in Q3 across the group is maybe a bit slower than you just reported for Q2? Is that fair or have I misunderstood that?

[Antoine Jouteau, executive]

No. This is not what I'm saying. I'm just saying that we are cautious and we -- this is a more volatile market, as you know. It's depending on the macro environment. It's depending on the traffic. So what I'm saying is that on this activity, which is more volatile with less visibility and more cautious, we are expecting now September coming and then we will give you the reason during Q3 results. But so far, we are still in the range of we were planning.

But I'm not saying that we are more pessimistic or optimistic. I'm just balancing the message on that to be sure that because just to remember, the drop in Q2, half of it was coming from Canada and International Markets. And the French market and the Spanish market are more resilient because of more local advertising revenue. So let's see how will be the Q3 results, but half of the decrease was coming from Canada.

[Andrew Ross, analyst]

Okay then. So to be clear, the ad trends that you're seeing in July and August are pretty similar to what you saw in Q2?

[Antoine Jouteau, executive]

It's pretty similar, yes.

[Andrew Ross, analyst]

Okay. Cool. That's very helpful. I mean, I guess, as it stands today, where do you think you are within the EUR 575 million to EUR 600 million range for the year? Do you kind of think the midpoint in a sense at all? And what are the kind of puts and takes between the high end and the low end because right now consensus is kind of at the low end on the same basis. So just trying to understand your thinking around that.

[Antoine Jouteau, executive]

Yes. What I said is we are confirming the range. It's too early to say where we will be on this range, but we will wait the Q3 results and we will have more visibility on that.

[Andrew Ross, analyst]

Okay. And then my final one is maybe one for Ajay if he's on the line, which is his kind of early perspective on mobile having been there now for a few weeks. But really curious to understand how you're seeing the longer-term opportunity, maybe potential to innovate on product and kind of what can be done with that asset on a 5-year view? Any kind of early observations would be very interesting.

[Antoine Jouteau, executive]

Yes. Sure. Ajay, you'll take this one?

[Ajay Bhatia, executive]

Yes. Thanks, Antoine, and thanks, Andrew. And finally, it's nice to be in Europe. mobile, I've been in the business now for 1 month and what I've seen of mobile is an amazing team here, amazing opportunities. The commercial gap that exists from an international perspective from mobile to some of the international benchmarks such as carsales.com or Trader UK, while there are reasons for it, but there is still -- the commercial gap is still quite large. So I see a lot of opportunity commercially, but I also see a lot of opportunity long term in online buying and selling. Something that we are focused on.

And we will be launching a solution within the next month around online buying and selling. So I'm very bullish long term. This is one of the reasons I made the big move from Australia to Berlin. But it reaffirms it in the first 4 weeks that opportunity is amazing.

[Operator]

The next question is from Lisa Yang with Goldman Sachs.

[Lisa Yang, analyst]

I have a few questions as well. So firstly, on advertising, could you remind us of the split between your major advertiser categories? So how much is OEM? How much is national versus local? I think you mentioned local advertisers are more resilient. So any split would be great.

The second question is on the pricing strategy. Obviously, you mentioned successful price increases so far, obviously the main one being at mobile. So I'm just thinking how you're thinking about your pricing strategy for the rest of the year and into next year? Any major sort of price increases like planned in any of the markets? And would that support, I would say, that double-digit growth of core markets that is implied by the guidance for H2?

And thirdly, could you comment on why Jobs were so strong in Q2, I think at 24%, and whether that's sort of sustainable? I know the comps are getting a bit tougher in H2, but should we still expect -- are we still seeing basically a sort of double-digit level of growth so far in Q3?

[Antoine Jouteau, executive]

Yes. Maybe on that, I think, Zac, you can give some outlook on the current market.

[Zac Candelario, executive]

Yes. I think specific to the question, the OEM automotive advertising spend for us is between 15% and 20% of our core market advertising revenues. I don't have the specific national-local split offhand. But I think those are the 2 main questions.

[Antoine Jouteau, executive]

Yes. And the second question was about mobile and also globally how we are approaching the price increase. Maybe, Ajay, you can give some context on mobile, what we have done and what we are expecting to do.

[Ajay Bhatia, executive]

Yes. So on mobile, there was just historically a 14% price rise in August last year and 19% blended price increase in April this year. The general thinking on the delay is, as I said, the commercial gap exists. Therefore, it's prudent to be aggressive with pricing, but at the same time responsible to manage the market and dealership profitability as well. So we will be thinking about mobile surprising in an aggressive way.

[Antoine Jouteau, executive]

Yes. And maybe, again, give some -- maybe, Gianpa, you can give some flavor in European Markets, in Spain mainly?

[Gianpaolo Santorsola, executive]

Yes. So in general, when it comes to pricing, we will review our pricing periodically as we always do. Then we plan to do some kind of pricing adjustments, for example, for Real Estate already at the end of this year. And then in Spain next year we will review pricing for the key verticals as we regularly do. And pricing adjustments will be the results of listed pricing adjustments, but also introduction of new pricing packages, new bundles, upgrades, et cetera, et cetera.

So I think our pricing activity will stay constant, which you have managed to see and you've seen in the past to consideration that inflation will also give some kind of further room for maybe price increases that might be a bit more aggressive than in the past.

[Antoine Jouteau, executive]

Yes. And regarding France, I will take this part. And usually, we are changing our pricing policy in September on the Real Estate market and in January for the Motors market. This is what we do. We try to combine 2 things: one is the pricing, the pure pricing, but also to combine with added value we are bringing to our customers. For example, on the Motor market, we have launched some lead-generation products to help our car dealers to find cars to sell. We will also bring some new stuff out to the Real Estate market in September. So we are continuing to value what we are bringing to our customers and I think that's key to regularly in the context of inflation, in the context of the weakest volume to continue to do that. Regarding your other question, the core market growth, maybe, Uvashni, you can answer on that.

[Uvashni Raman, executive]

Yes. I mean that question was around the double-digit growth and whether that's achievable. I think, yes, we are confident around that, and we have the price increases that are contributing to that. So the way things stand right now, yes, we're still confident around the double-digit growth.

And then the last question on Jobs sustainability. I think when we talk about Jobs and the Jobs sustainability, there are tougher comps in H2 compared to what we see in the first half of this year. Gianpaolo, I don't know if you want to then comment further on that from our perspective.

[Gianpaolo Santorsola, executive]

Yes. For sure. Jobs is particularly strong in Spain and also a good position in Italy, where we share the same platform within for Jobs. I think that now the market is developing pretty well. And we know that Jobs is cyclical vertical more than the others. So we ask you not to panic. In 2019, when Jobs was going down and now we are seeing the rebound effect that we were expecting, and this is very good. In H2, the comparables will start to be a bit tougher, but our position are stronger, we're still very confident.

So just to give you an example, job creation is continuing in Spain and also the government issued a new law that we requested 40% of the new job created will be permanent jobs, not temporary jobs. This will mean that we will have less number of contracts, but more of those contracts will go to players like InfoJobs and less to players like temporary agencies.

So overall, yes, it's a cyclical market. Our position is very strong, but we still are confident about future prospects.

[Lisa Yang, analyst]

That's really helpful. Can I maybe ask another question? So Antoine, you mentioned in your introductory remarks that simplicity would be a main focus for you. So I'm not sure if you can give us a bit more flavor in terms of what you actually mean by that. Do you mean by the sort of the size of the portfolio? Or you think in general, the operations or the way the business is run could be leaner, so there could be maybe more cost savings along the way? Yes, any color would be helpful.

[Antoine Jouteau, executive]

Yes. So what I was -- I tried to explain, it's only 2 weeks. But what I'm saying is that I'm very focused on the core market now we are running in Europe and in Germany and France. And on the core markets, we want to expand on Real Estate, on the Motor and transaction and that's something we will continue to execute and to operate strongly.

In parallel with that, we will accelerate on the financial discipline. That has already started, but we will continue to be strict on that. And especially on the capital allocation, we will put the means and the money where we think that it has an impact to our business.

So that's something I will be very close to and that was my message on that, right? Very -- more focus on the key area, the key business area, and be stricter on the means we are putting on that topic. So it's really to nail and to prioritize and to simplify the way we are spending our money and the way we are executing.

[Operator]

The next question is from Matti Littunen with Bernstein.

[Matti Littunen, analyst]

First question on OLX Brazil. Quite a few moving parts to the one in loss there. Could you give us a bit of color on how we should think about the next couple of quarters developing, for example, if we hold FX rates flat?

Then on the synergies, looks like very quick execution there. Should we still maintain our view on the pacing of synergies for the coming years or could that perhaps be moved forward a bit?

And then finally, on share-based compensation, a bit lower than expected in Q2 is the sort of outlook for the full year in terms of the total amount changed or is it still the same?

[Antoine Jouteau, executive]

On the OLX Brazil, maybe, Zac, you can give some view for the current situation and the next quarters.

[Zac Candelario, executive]

Yes. So I think for the current situation, I think we've seen some strong growth both in automotive and our transactional offering and we expect that growth to continue. The main deceleration in OLX has been around advertising, and that's on the back of softer traffic on the OLX platform and that also is linked to a softer advertising market. So that's an area that, as Antoine had said, we're being cautious about that for the remaining part of the year. . The Real Estate business, while it's strong, it has decelerated a little bit as we've seen some reduction in the volume of clients that we have on our triple-bundle package. But we expect the numbers to continue to grow at strong double digits.

[Antoine Jouteau, executive]

Thank you very much, Zac. Uvashni, about the synergies to...

[Uvashni Raman, executive]

Yes. Listen, just to clarify, the H1 synergies that we have secured is to then achieve the synergies for financial year 2020 (sic) [ 2022 ] targets. These are essentially the shorter-term initiatives. We, of course, have longer-term initiatives that we are still trying -- going through and effectively clarifying positions and pushing to execution. So those will be over a longer term and make a little bit more complex in the shorter-term initiatives.

I think that we are still confident around the EUR 130 million, but I don't want to change the pace of that now. As we go through these initiatives and bring them into execution, then at that point in time we will decide on the pace of acceleration or not. On the share-based compensation, we see no change as of now. In Q2, we did see a price that was lower. Therefore, it does have an impact in terms of your share price and what will actually vest at which point. This, of course, can change. And then when we have allocations of share price -- of new PSP as well and management changes, our plans do change and that could then influence and impact on the cost of the share-based compensation.

So it is one of those variable amounts. And that is why we like to look at it including share-based compensation then excluding share-based compensation on our performance to understand the true underlying performance of the business.

[Operator]

The next question is from Catherine O'Neill with Citi.

[Catherine O'Neill, analyst]

Great. I just wanted to come back on mobile specifically, actually, and whether you could tell us more about the online buying-selling service that you're launching in the third quarter. Specifically, what revenue model you're looking at and what the conversations with dealers have been around uptake and how we should think about the impact on revenue and margins?

[Antoine Jouteau, executive]

Ajay, you'll take this one?

[Ajay Bhatia, executive]

Yes. Thank you, Antoine. Yes. No, thank you for that question. And we would be launching the online buying and selling solution sometime in September. And the initial model is an asset-light model where we are trying to control consumer experience as much as we can.

And the initial conversations with dealers have been very good. And we are partnering with dealers. Unlike some of the online dealers who tend to compete with dealers, we are, in fact, partnering with dealers. So it's -- the conversation with dealers has been very, very good.

Of course, we haven't launched this solution yet. So we still have to see the solution in market. Our competitor has launched a similar solution in the market. And that -- one of the benefits of being second is we've had a lot of experience and learnings from that and how the dealers have responded to that. So we're improvising our solution based on that feedback. But we're also thinking not just of the launch in September, but also the next launch 3 months after that and how we can continue to improve our revenue model.

The initial model is a lower-margin model focusing on customer experience. That doesn't necessarily mean that will be our longer-term model. We will continue to experiment with the model and we're already thinking of improvements to that.

[Catherine O'Neill, analyst]

Okay. And so when you talk about the revenue model, is it entirely sort of commission based or is there sort of a subscription element? How are you thinking about it initially?

[Ajay Bhatia, executive]

It's commission based. So we are thinking of the commission in the first instance. So it's based on performance, it's based on selling cars. The more cars we sell, the more we will earn.

[Catherine O'Neill, analyst]

Okay. Great. And the other question I've got, more on to the financials for the group, is on the marketing cost side of things. Could you talk about how we should think about the phasing in the second half or -- and maybe kind of what COGS we're looking at? Because I know you mentioned in the 2Q, obviously, there was a benefit in terms of being up against quite high spend in France last year given the 15th anniversary.

And then you also talked about interest costs coming down. Are you able to quantify that or help us to think about how we should model that?

[Antoine Jouteau, executive]

Yes. What I was -- thank you for your question. On the marketing cost between Q2 this year and last year was mainly France where we had an extra cost in marketing during the 15th anniversary. It has impacted positively the margin of France. Now we are implementing some strict marketing budget control on that. We put the money what we think that is the most relevant.

And for the rest of the portfolio, on the -- for the other eCG assets, there we'll continue to spend money, but to sustain some important markets for us like a transaction in Kleinanzeigen, which is important for us to keep vibrancy on this area.

We are not saying that we will -- the marketing spending are depending really on the quarter we are running. So we have some seasonality on this cost line, but we have a strict control on that and we want to be sure that we are spending our money in the most efficient way we can.

Regarding the -- I think you had a second part of your question, right? I'm sorry, I skipped it.

[Catherine O'Neill, analyst]

Yes. Sorry. On the interest cost so...

[Antoine Jouteau, executive]

On the what, sorry?

[Catherine O'Neill, analyst]

Interest cost. I think you talked about reducing the cost or reducing the rates. I just wondered if you could help us to quantify that in terms of modeling.

[Antoine Jouteau, executive]

Yes. Uvashni, maybe you can...

[Uvashni Raman, executive]

Yes. We are talking about the long-term impacts of that and then the movement from a variable to a more fixed rate. So at this point in time, it's the repayment of the deleveraging. We haven't got the exact amount yet, and I'll get back to you on that because it's a long-term modeling of that. So I will revert to that question directly to you.

[Operator]

The next question is from Sarah Simon with Berenberg.

[Sarah Simon, analyst]

I've got 2 questions. First one was on the autos business. Obviously, you put through some, as you said, pretty aggressive price increases in Germany. Are you seeing any change in terms of customer churn there? Because obviously, for car dealers, life is getting significantly more difficult. It was all right when price rises -- prices were going up and they could turn the cars really fast. But obviously, as you've said, they are taking longer to sell those cars now. So I'm just wondering how that sat with the customers. And then the other one was just on investing in the transactional model. I mean it's kind of interesting that you have been highlighting that as extra cost because Auto Trader in the U.K. has managed to keep investing in its transactional model without really moving its margin. So do you think this is just more because you've been slow to invest and now it's coming at a more intense pace? Or is there kind of something different?

Sorry, the final one was in the last question there was a comment about the initial model of autos -- online auto selling being asset-light. But does that suggest that you are actually contemplating an asset-heavy model?

[Antoine Jouteau, executive]

Yes. Maybe, Ajay, you can comment on the German market and Gianpa on the Spanish and I will do on the French market regarding the customer churn or the price -- or the impact of the price increase on our customers.

[Ajay Bhatia, executive]

Yes. And thanks, Sarah, for the question. Good questions. So on dealer churn, it's stable from before and after the price increase. There's been no material change to dealer churn. Most of the markets see this, with tough conditions, the #1 seems to always be quite stable with these kind of price rises whereas the #2s and 3s tend to experience a lot more churn in these markets. You might have seen through our deck as well our market traction continues to improve against competitors. So that's the short answer on price rises and churn.

And in terms of the asset-light model that I mentioned, that doesn't mean we're going to go into asset-heavy model. If anything, we are thinking of more scalable models and asset-heavy models don't scale. So we're definitely not thinking of asset-heavy models.

[Gianpaolo Santorsola, executive]

Yes. Sorry, Sarah for Spain, we have not seen any meaningful effects from price increase in churn or in market share of careers in Spain. We have a market share above 90% and is at that level. And also, we have executed that price increase in the Netherlands with Marktplaats during Q2. And also there, we're not seen meaningful increase in churn.

[Antoine Jouteau, executive]

Regarding France, and it's a global comment. I think in our portfolio, we have very strong Motors as a brand and leadership position, and always the leader has more flexibility to do price increase than our challengers.

In France, it's exactly the same comment. We are -- when we are increasing our prices, we are also bringing added value in our packages to be sure that the return on investment for our customers is higher, and that's what we see in our KPIs and what our challengers are seeing in their KPIs also. So that's key. We are reasonable, but reasonably aggressive. And at this moment, there is no impact on the churn. We noticed also that the car dealers margin have improved during the last months and the last year. They have approached quite aggressively the margin in their activity. So that's good news. We are taking our part, but always bringing added value.

Regarding the second question about the transactional opportunity on the Motors area. You know that in mobile, the business model is different from Auto Trader in the U.K. because the business model is dependent on the volume of ads live on the platform. So we are more dependent on that. This is the business we have, and it's positive when the volume are growing and less when volume are stabilized.

So we are more dependent. Also at the same time -- so we need to keep this business positive. And as I said, we will implement new transactional features. That requires product and tech investment, but that I think also we believe in and we have significant opportunity on that. And it's a different market also because the value of the car are different.

So we cannot fully compare the 2 markets. But what is important for us is that we believe that going to transaction on this area is positive for the business of mobile and not only for mobile, all the Motors Classified business in Adevinta can take advantage of these products in Germany. And now the idea is how we will be able to expand and to scale these learnings and the success in mobile in the other assets. But yes, you're right, there is an initial investment. It is a reasonable one, but behind opportunities for us to grow.

[Operator]

The last question is from Silvia Cuneo with Deutsche Bank.

[Silvia Cuneo, analyst]

Congratulations on the results. I just have a high-level question on the cyclicality of the business. Antoine, in your message in the press release, you highlight how the Classified revenue performance in Q2 demonstrates the countercyclical nature of online classifieds. And obviously, some areas like Jobs tend to be more cyclical. So can you please just tell us a bit more about how a lower macro environment might be good? Is that driving a higher volume of listing enhanced revenues?

[Antoine Jouteau, executive]

Sure. You know that our Classified business model is pretty recession-proof, being driven by 2 consumer trends. One is the economic optimization, the cheaper second-hand products and ability to sell these goods are positive for our users and they will use more and more platform during this period for facing this tough situation for them; and sustainability. And I think those trends will prevail in a weaker macro environment and any economic or one way actually benefit from it.

In Real Estate and Motors, honestly, the Motors area is already impacted by the crisis. And now we see some inflection on the volume, but it's quite early to say what will be the next month. And the thing -- the phenomena we see now is that we see some inflation on the price on the used cars and that's something, which is positive for our car dealers and also for us.

On Real Estate, always this real estate market is sensitive to inflation. So far, we don't see a lot of impact in our business. Our real estate agents are resilient so far, but we will analyze what will be the impact for them during the next month, and we are very vigilant on that.

We have also a very diversified range of products we are proposing to our real estate agents and car dealers. We are proposing many tools to analyze the efficiency of what we are providing, management to system dashboarding, which is really tools to analyze the efficiency of our platform. I think these tools are necessary for them to digitalize their activity and to face this environment. And the marketplace we are running already bringing added value to our business in their daily life. So they need us and we need them. And we'll cross this context, I think, together.

And on the last part, the advertising market. We have already commented it, which is more volatile than the other. But on the core market, we are solid. We have strong relationship with marketers. We have solid business model. So we are confident, but also aware of the difficulties our users and our customers are facing.

[Operator]

This concludes our Q&A session. Mr. Jouteau, the floor is yours.

[Antoine Jouteau, executive]

Yes. I would like to say thank you for listening to us, and sorry for the technical issues we had during the call. I would like to reinsure you that we are very focused on delivering our goals for this year, focused on operational excellence, financial discipline as you heard during these calls many times, and capital allocation will be the keyword for the next month.

And I will meet you soon for those that are present in Oslo today and in London tomorrow. And also, I will come back in Q3 with more details on the half. And in between, I wish you a very good day. Thank you very much for listening to us. Bye-bye.

[Operator]

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your devices.