Delivery Hero SE

XETRA:DHER

Earnings Call Transcript 2021-Q2

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining Delivery Hero's Q2 2021 Trading Update. [Operator Instructions] I would now like to turn the conference over to Daniel Fard-Yazdani. Please go ahead.

[Daniel Fard-Yazdani]

Thank you, and good afternoon, everyone. Thank you for joining this call today. We trust that you have all received the release and the slide deck on our second quarter trading update that we published this morning and that we have also sent out by email. These documents are, of course, also available on our IR website. As always, Niklas and Emmanuel will summarize the most important aspects of today's release in the next 20 -- maybe 30 minutes. And after that, we are looking forward to answering any questions you might have. Before I hand the call over, let me quickly mention that this is my last trading update call and almost my last day here, as I will be leaving Delivery Hero. I would like to thank you all very much for the trust and support in the past, and I hope to see you again somewhere. I am happy to be handing over the IR lead to Christoph Bast to whom many of you have already spoken. So I'm happy to know that you will be in very good hands. With that and without further ado, let me pass the word to Niklas.

[L. Niklas Oestberg, Co]

Hey there, everyone, and hope you are doing well. As I have to share our second quarter with you, we'll do it fast to give space for Q&A shortly then. But first, let's reiterate our vision, which is to always deliver an amazing experience to our customers. We do this with traditional food delivery, but, of course, also in the significantly growing quick commerce space. We are today a true delivery super app. We deliver whatever you want. You already know the premises that we have laid out in the first or in the past and that hasn't changed. So that is then also summarized on Chart 3, and I think we can move forward here. But before going into Q2, let me recap that we continue to present numbers on a pro forma basis as we have done already at our Q1 trading update in April. This means that we exclude Delivery Hero Korea for the full year and include Woowa for the entire year. Let's now look at some of the main developments since our last trading update on Chart 6 here. I already mentioned the tremendous growth we have achieved again this quarter, and this despite very limited COVID impact. Quite importantly, we have scaled up our OD in South Korea quite substantially with the launch of Baemin 1 in June. I'll give you a more detailed update on this later. We have continued to press forward with the expansion of our Dmarts offering. We added another 85 or 84 stores in Q2, and we have -- or had 687 active stores at the end of June, which is now far about 700. In Germany, we had a proper launch of our business there, with foodpanda 2 days ago. And we, of course, remain very excited to building our service out here. Already in late May, we have adjusted our footprint by selling our Balkan operations in Glovo or to Glovo for a total consideration of EUR 170 million. Specifically, the sale comprises of our operation in Bosnia and Herzegovina, Bulgaria, Croatia, Montenegro, Romania and Serbia. We think Glovo is well placed to continue investing into improved customer experience, long-term sustainable operation and further build out the businesses locally. And given our stake here in Glovo, we are indirectly going to benefit from the upside that we think Glovo will generate post this transaction. Finally, moving away from direct financials, we have also kept the momentum up in the ESG part of our business. We have initiated a Sustainable Packaging Project with an objective to reduce plastic waste as well as carbon emission. We are going to provide local restaurants with eco-friendly packaging solutions at a competitive cost. In a first step until end of the year, we aim to deploy 10 million units of sustainable packaging in 8 selected countries. After this, we want to expand the program to additional markets and thereby reinforce our commitment to sustainability. And with that, I'll hand over to Emmanuel for the financials of the second quarter. Emmanuel?

[Emmanuel Thomassin]

Thanks, Niklas. So good afternoon also from my side. As Niklas already mentioned, the second quarter have been another tremendously successful quarter for us. We recorded 730 million orders, which correspond to an increase of 79% year-on-year and over 10% quarter-on-quarter. The GMV or gross merchandise value advanced by almost the same pace with 74% to reach EUR 8.4 billion. And finally, total segment revenue in the quarter up by -- at EUR 1.5 billion, which compared to EUR 0.8 billion in the same quarter last year, and therefore, an increase of 105% in reporting currency and even 115% year-on-year in constant currency. I already mentioned most of the second quarter numbers for the group, but let me add a bit of details on Chart 8. So we reached an own-delivery share of 50% compared to 46% on a pro forma basis a year ago. And the modest increase stems from the fact that due to the inclusion of Woowa in the numbers, there are historically lower OD share. That results in a lower growth on the group level. But this should reaccelerate with the rollout of the OD in South Korea. But we will cover this separately in a moment. The Woowa Group, although, also continued healthy growth in H1, with orders increasing by 66% year-on-year and the GMV by almost the same magnitude at 68% and revenues rising up at 76% compared to the same period last year. We will publish our full set of numbers in H1 reporting 2 weeks from now. But on primary basis, the H1 2021 adjusted EBITDA to GMV, the margin stood at minus 2.1%, which shows a very positive development from negative 3.6% in H1 last year in 2020. So now turning to Chart #9, our largest segment, Asia. So please remember that the sizable group operations are included in this segment. And despite the fact that the Korean business is growing a little bit less than some other of the countries in Asia, we have again achieved significant growth in the region. The orders are up by 71% year-on-year. The GMV is up by 68%, and the segment revenue are 84% higher than in Q2 2020 on reported currency and even higher on constant currency. So overall, a significantly higher growth by the ones reported by our peers in the region, which means that we are gaining market share. We will give you an update on the rollout of the OD business in Korea in a moment on the next slide. But now let's move to MENA. So now looking quickly at MENA on the Chart #10. As you remember, this segment saw order numbers going down by 6% in the second quarter of last year due to the COVID-related curfews and restrictions. In that sense, the segment had an easy comp this quarter. In addition to having returned to its normal growth trajectory already before, we're now showing very decent growth numbers. The orders were 122% above the prior year number at EUR 148 million. The GMV on a reported basis increased by 97%. And adjusting for FX effects, however, the increase was almost the same level as the order at 124%. And also, the segment revenue came in strong with an increase of 117% on a reporting basis and even 142% adjusted on FX effects. Now going to Europe. The orders continue to grow quite significantly with 63% year-on-year. We've seen a slight deceleration as restrictions fell away, but July's growth was still very healthy with 50% year-on-year. Growth of GMV and segment revenue was even higher at 71% and 96%, respectively, with a little less in constant currency. Now let's move to Americas, and I will keep my comments very brief on Slide 12, which summarize the developments in Latin America. So we're very happy to see the strong growth that we have seen in the recent quarters continue. The orders went up by 77% year-on-year. GMV increased by 86%, and segment revenue growth was again above 100%, at 110%. The OD share in LatAm or in Americas are already high in the region and continue to climb further to 86%. Finally, on the next slide, Slide 13, you will find the numbers of the Integrated Verticals segments. As we continue to roll out our new Dmarts, our growth continues to be extremely strong. We recorded 21 million orders this quarter, making us the leader in this segment. And we achieved growth of 249% year-on-year. GMV and the segment revenues increased by similar magnitudes. Magnitudes were 254% and 237%. Already today, the segment contributed to 15% of the total segment revenue. And while, of course, revenues are much higher in this segment due to the different revenue recognition compared to the platform business, we think that this is still a remarkable achievement. We also generated about an equal amount of orders in our third-party stores, but those are not part of the Integrated Verticals segment, as you know. On the contribution margin on the next slide, we are also publishing an update here with the contribution margin chart. And as we know that this is of high interest to you. On this chart, you will find the figures of the margin before voucher cost. All segments continue to be positive -- in positive territory on that basis. And what is again important to mention is that the margins in this slide -- on this chart does not include the non-commission revenue or the NCR that we are generating. So in H1 2021, for example, we reached 1.6% of GMV, which is already slightly up compared to the 12 months in 2020 when this figure stood at 1.4%. But now let's look at the developments on the post voucher cost basis on Chart 15. As you can see, all region, apart from Asia, have a positive contribution margin and even though with a slight decline compared to the prior quarter. Important to notice for Asia is that the line, of course, shows the entire segment. Keep in mind that we are investing significantly in Japan. And at the moment, excluding this, the margin share will improve by around 1 percentage point. For Asia, the slight decline in the margin is almost due to some rider shortage we have experienced in some countries in the region, which had the corresponding effect on cost. The shortage was mainly due to restriction or curfews linked to the pandemic. And in terms of voucher usage, they went up slightly compared to the total segment revenue, and the ratio stood at 12.3% in H1 2021. And we still stick to our guidance, that for the full year, we expect to come out with a number below the 2020 level, when the ratio stood at 11.8%. Now on Chart 16, we present an overview of where we stand regarding our cash position. So having ended the 2020 with operating cash of EUR 2.7 billion, we were at EUR 1.7 billion at the end of June 2021. And while we have raised EUR 1.2 billion of cash at the beginning of the year, we also had a sizable outflow of cash due to M&A activities, and, most notably, the cash component for the acquisition of Woowa. But in this, we, of course, had a cash outflow due to operating results as well as a lesser degree due to CapEx and other items mentioned on the chart. On the next chart, we are sometimes asked about the portfolio of minority investments we hold. We have, therefore, decided to give you an update on this one. As you can see, the total market value of our portfolio is EUR 2.3 billion. The largest position in our stake in -- is our stake in Glovo with 35% followed by the one in Rappi with 21%. And the next 3 positions are Deliveroo, JET and Zomato. In addition to the learnings that we have made from holding these investments, we have also generated very attractive returns in double digit and sometimes even in triple digit percentages. And with that, let me hand back to Niklas for a more detailed view at Korea and the development of the Dmart business. Niklas?

[L. Niklas Oestberg, Co]

Thanks, Emmanuel. So let's start with the development of the important Korean markets first. On the chart here, you will find an overview of some major developments since June when Woowa launched Baemin 1 which is the name for our main OD offering, our own-delivery offering. We launched this to close any customer service gap in the country. As you remember, the only reason for Coupang to have gained traction last year was that they offered a faster delivery compared to the experienced customer making at Grubhub or also at Chowbus for that sake. With the launch of Baemin 1 in June, the gap is now closed, and we are now rolling out our product in Seoul and elsewhere. On the back of this, the share of OD already doubled on a nationwide level to 8%, and it reached 29% in Seoul where we first launched Baemin 1. So again, we moved to 29% in that city. This was achieved because the team did a fantastic job by signing restaurants very quickly for this offering. We already have 66,000 restaurants live in June. And I told you it would go in very aggressively. And this is what aggressive looks like. It goes without saying that the sales team is doing a fantastic job adding an insane amount of new restaurants every day. And we said before that we will, of course, invest in signing restaurants first by using a promotional period, but the ultimate pricing is set to be the market standard or market standard with a 12% commission fee plus 3% payment fee and a KRW 6,000 delivery fee. The average food value is currently around KRW 21,000. So I think this is a very healthy level. Again, please keep in mind that we have a very strong brand equity, superior choice and customer service in Korea. And by now adding the fast delivery option, we are further strengthening our position in Korea. And I would add, at this point in time, we deliver also faster than our competitors in the market. This chart shows you some more details on data points I have already mentioned. You can see the very fast ramp-up of the restaurants that have signed up to the OD offering on the left-hand side and the corresponding increase of the share of own-delivery. As mentioned, we already reached 29% in Seoul. What is probably most interesting to you is the recent development of the active user share according here to App Annie in South Korea. You can see on the right-hand side that while Coupang has been able to increase their share last year, in the recent weeks, their share has declined sequentially, while that of Woowa has further increased. You take this as an encouraging sign that our strategy regarding the additional product offering and faster delivery is already paying off. And you should rest assure, we are very determined to push ahead hard in Korea to defend our very strong position already. Let me now give you a few more comments on our Dmarts business on chart -- or here on the slide as this is also understandably getting a lot of attention by the market. We continue to see very good traction for our offering across the countries we operate in. What you can see on the left hand on the chart is now the orders are developing on our Dmart that have been active since June 2020 or before. As you can see, they are scaling up their orders quite rapidly. And after 12 months, around half of these stores have 400 or more orders per day. It shows that we are in a -- very good in determining where to open a Dmart and to make use of the existing customer base to choose the right location. And just for reference, any competitor going without this traffic will have to spend billions to achieve what we achieved with very limited marketing cost there. Anyway, we are often asked how our assumptions regarding the basket size of Dmarts compare to the traditional food delivery business is trending. And we are giving an update on this on the right-hand side of the chart. We have compared the average basket size of the Dmarts in the countries we are active in today with the average basket size of the food delivery business. They have then built a weighted average across these countries. And as you can see here, in June this year, the ratio on average food value stood at 1.17, which means that the average basket size in our Dmart business is 17% higher than that of the food business. 6 months ago, the Dmart basket size was only 10% higher. In that sense, you can see that the product is well received by our customer, and they are increasing order more via the Dmarts. In terms of profitability and in the context of current competitive environment, which is fueled by a significant capital flowing into the sector, we think it would be unwise to optimize for profit at this point in time when many competitors are only caring about the growth. We are, therefore, reinvesting efficiency gains into the business in order to increase our footprint rapidly. We want to achieve faster delivery times, acquire more customers and be very competitive when it comes to pricing. If this means that we will have to prolong the time to -- it takes to get to breakeven per store, we are more than happy to accept this. If we make economics tough for us with our scale and efficiency, it's going to be incredibly hard for our competitors. In general, we are convinced that many competitors will realize that it is a little bit harder than they think to get this business model profitable. What you need is scale, experience in operating and logistic-driven business model. And on top of that, the combination with the food business to leverage the same customer base and the same fleet in order to drive efficiencies much faster than you could if you only have 1 part of the business. In that sense, we are very happy to be patient and wait to see the current hype around quick commerce settling down a bit. We are certain that we will emerge as one of the winners in this sector, if not the winner. Finally, as you have probably already seen in our release this morning, we have decided to adjust our guidance. Given the strong growth we have already recorded in the first half of the year, we are reflecting this in our increased growth outlook. For GMV, we have so far exceeded or increased the range -- the previous range from EUR 31 billion to EUR 34 billion, and we have now narrowed it and increased it to EUR 33 billion to EUR 35 billion. Similarly, our expectation for total segment revenues are now higher as well. We expect this number for the full year to come in between EUR 6.4 billion and EUR 6.7 billion. Up until now, our outlook has stated a range of between EUR 6.1 billion and EUR 6.6 billion. We are also adapting our EBITDA guidance, which is -- which so far has been a range of 1 point -- or negative 1.5% to 2% of GMV. We are now expecting a margin of around 2% for this year. And I think that's it from our side. Very much looking forward to your questions. Operator?

[Operator]

[Operator Instructions] The first question is from the line of Joe Barnet-Lamb with Credit Suisse.

[Joseph Barnet-Lamb]

Excellent. Two questions for me, given the first 1 sort of has multiple parts. So firstly, you've moved profit guidance to the low end of previous guidance, but left the EUR 550 million of investment in new geographies unchanged. And I guess that implies about EUR 100 million reduction in core profitability versus where people were before. And your full year profit guidance and 1H profit delivered implies no meaningful margin improvement in 2H. So all of this together seems to tell us that you're going to invest more in existing geographies in 2H. Is that a fair read? And if it is, is that investment largely Baemin 1 and your fight back in Korea as discussed in the presentation? If so, will that peak in 2H '21? Or will the further investment in Korea continue to ramp in FY '22? And then the second question is on Deliveroo. And apologies if it comes across as a sort of provocative. You announced a 5% stake in Deliveroo. Niklas, on Twitter, you explained it was a financial investment. Do you see this as a regular course of business for Delivery Hero? I.e., could we see more just financial sort of investments or speculation in other businesses? And finally, are you saying there's no strategic angle at all to your position in Deliveroo?

[L. Niklas Oestberg, Co]

Thank you. Maybe you want to start on the EBITDA side and then I'll probably take on Korea.

[Emmanuel Thomassin]

So well, first, I mean like maybe to repeat like compared to the previous year, we improved our group EBITDA, right, adjusted EBITDA massively moving from the minus 3.6% pro forma to now minus 2.1%, primarily as you saw. And we had a good momentum in H1 in terms of growth. So the additional EBITDA investment applying our new guidance would be deployed mostly in other areas. We obviously see very good opportunities in a handful of countries where we want to extend our market leadership. And again, I mean, I should add that this EBITDA in H1 was negative by minus 2.1% on GMV. But underlying the profitability is increasing as we -- and we were trailing well within the negative EBITDA guidance that we gave, something between minus 1.5% to minus 2.0%. So however, we feel that they are in a few markets where we would like to invest harder. And we are already gaining market share, but this should hopefully help further. So that's the reasoning behind this further investments. But maybe, Niklas, you want to add something on Korea?

[L. Niklas Oestberg, Co]

Yes. And maybe first a little bit to add on that. We also reserved some money to respond if someone of our competitor is scaling up. We never want to be in a position where someone can bully us. If competitors like to beat us, then spending up won't help. They have to find other ways to have a chance to overtake us. Spending will not do and we don't want to be bullied. So then I would probably also, in general, speak about EBITDA and a little bit remark there. All global players could easily be profitable. And I take Deliveroo as an example. We plan to be circa 2% negative EBITDA on Deliveroo. We could improve 2% by increasing commission or by just 2% or add 2% delivery fee on orders. So very marginal fees there, of course. We could also add service fees like some other players do or we can increase logistic efficiency with, let's say, 15%, 20% to get there, too. Or we could cut 2% of our shares or we could increase baskets with 10%. It actually requires less than 10% basket increase in order for us to improve EBITDA to -- from minus 2% to 0%. Or we can do a combination of those. So there are so many levers or levers for us to get to that probability. It's just that we have absolutely no rush. We see this as a very long race, and we are committed to win. And we want to have the flexibility, as I said, and we're clearly trading below 2%. And yes, there are a couple of markets we would like to double down a little bit, but we also like to making sure that we have the reserves to fight anyone who likes to bully us on spending. That should not be a way to beat us. And so that's why we also want to have a little bit of flexibility there. In terms of Korea, I cannot respond on which markets we -- where we see a possibility to spend up or where we see a good opportunity to further gain market share. I think we gained market share in every market that I'm aware of with maybe exceptional one but where we did a little bit of a mistake on social media, speaking of Thailand here. But I think that is very temporarily and hopefully we can also resolve that. But I think apart from that, we are gaining market share in every single place. And this extra potential investments will further improve that position. Then you asked also Korea, peak or sell. I don't comment on specific market but I think, in general, we are making big investments to moving from marketplace to OD. We think it's a very healthy move. It's good for our customers. It's good for restaurants. It's good for our riders, but it's also very good for us. I think we have more margins to be made or actually move to more market standard gross profit rates as we do so. So for that reason, as things start to play out of moving from temporary promotional pricing to normal pricing, there will also be a significant uptick in terms of gross profitability there, which is hard to spend down. So as I said, I don't want any particular markets, but I think people should be fairly confident when we speak about Korea. And apologies here because it's a lot of question and very critical question, good questions. So I'd like to respond to them carefully. And you asked about Deliveroo and no strategic intention. And I guess that might be true. But I would also say that we always have some logic when we make these kind of investments. There is some logic or strategic rationale for an investment. This could be relationship for future partnership. This could be to gain knowledge. This could be acquisition plans. This could be preempting others. This could be cooperation agreements or something else. There are all sort of different reasons why we would see an investment in a company, mostly private companies, but in this case, as a public company. Many of these bets are long-term considerations. We cannot always share what the specific rationale is for an investment. But we have consistently done investments in a company like Zomato, Glovo, Rappi, Just Eat Takeaway and others, In most, the strategic rationale has played out the way we planned. Additionally, for us to make a deal, we also have to see that it make good financial sense. And I think we have consistently done that too. To give you a couple of examples here, we invested below EUR 2 billion valuation in Zomato 2 years ago. It's now valued above EUR 11 billion. We invested at around EUR 300 million valuation in Glovo 3 years ago, and that is worth significantly more now. We invested on below $500 million valuation in Rappi 3.5 years ago, and I think it's publicly known that, that is approximately $5 billion business today. We also made a 55% return in Just Eat Takeaway in just a few months when we sold some and locked in some gains from the increase we had from EUR 25 share to, I think, around, let's say, EUR 75, the collar, and that was 2 years ago. And we used that cash to invest in other opportunities, which turn out to be a very good decision, too. So if something doesn't make sense anymore or we lose the strategic rationale, then we are happy to get out and capture our gain or loss if that would have happened. But so far, we have made multiple returns, in some cases even more than multiple returns. So I think we are pretty happy here. We have a good view on this business model and how they work. And today, thanks to some of these investments, we have a portfolio of EUR 2.3 billion of pretty strategic holdings. Some will play out, the strategic rationale, and some maybe not. But I'm pretty hopeful that in several of them, the strategic rationale will play out. And in many cases, it already happened. When it comes to Deliveroo, I can't share any strategic rationale, but I can share that I will -- that I like Will and his team. I think they have done a great job. And when we started buying into the stock, it was at GBP 2.3 per share. The multiple on GMV was below 0.5x. And we thought this was highly undervalued based on the company we know because we know it's a good company, and we didn't see a reason why a company that's growing 100%, having good economics, barely making -- losing money, so good economics, why that would be valued at such a discount. So we also saw this as financially pretty attractive. But it needs to be both financially attractive, and there is always some other aspect to it. So thanks for listening for a very long answer. Yes.

[Operator]

The next question is from the line of Miriam Adisa with Morgan Stanley.

[Miriam Anuoluwapo Adisa, Equity Analyst]

First one, just a follow-up on your statement about these EBITDA investments and the fact you'll be investing harder. Is this you preempting an increase in competition in these markets? Or have you already started to see an increase in competitive intensity? And then also on the contribution margin, so it contracted a little bit quarter-on-quarter. So was that driven entirely by the driver shortages in all regions? Or were there any other factors that contributed to that? And should we expect that to continue in the second half? Or is this increased investment coming through marketing rather than driver costs or downtrading? And then finally, if you could just give a bit more color on the acquisition you made today in terms of financial impact. And then also just linked to that, if you could just share your latest thoughts on the dark store versus the third-party model for grocery and if you're starting to favor one versus the other?

[L. Niklas Oestberg, Co]

Okay. So several questions here. Maybe I'll cover first the competition point. Maybe you'll manage the contribution part and then I'll go for the rest. So no. When we look to the food segment, I would say competition is probably less than what it has been. So I think competition is less than what it was in Q1. It's less than it was last year. It's less probably than it was before that as well. So I think we have seen a gradual trend and probably even more so in this quarter. We see both in Korea as well as Asia as well as against Uber Eats, against I think all players, the competition has been less intense. So we have not seen that yet. But I think we have seen more competition on the Dmart side, and there is definitely more capital coming in there. We might not have seen it in our markets yet, but we are very ready and aware. If someone comes, we will scale up faster, and we will move even harder on economic strength. But so far, we haven't seen anyone entering our place there. But we -- as I said, we see good investment opportunities. We see good returns in places in a few countries as well. And we think that we can have a good return in some of them. And therefore, we think it makes sense to add this flexibility and possibly grow a little bit harder in a few places to further strengthen our market position. So far, so good. Contribution margin, Emmanuel?

[Emmanuel Thomassin]

Yes, yes, sure. So yes, they are -- the reason for the slight decline are different for each segment. So let's start maybe with LatAm and the GPO -- our GPO after we bought in LatAm remained unchanged. In MENA, the GPO declined a bit due to our structural changes, especially in KSA with the so-called Saudization of the rider fleets. And consequently, we had an increase of our CPO. So we had to include more and more local riders, if you wish, and that's had an impact on our CPO in general, the shift of this rider fleet that we have in the KSA.In Europe, we are increasing our OD share in Greece. And this is a -- Greek is moving mainly for marketplace model to an hybrid one or more to OD. And hence, the GPO there in this country is still not positive. And in Asia, finally, the reduction was mainly due to our seasonal rider shortage and mainly in Taiwan. And consequently, as from the pandemic and also some related restrictions due to the pandemic. So different kind of reasons for the segment. I would say like going forward, like the Saudization is something that we will probably see also in Q3 as we had to rebuild the place. Do you want to go for the rest?

[L. Niklas Oestberg, Co]

And then you asked about the acquisition and you're referring, of course, to Marketyo in Turkey, which is an online grocery platform and a very good one. And this is a very strategic investment for us or investment acquisition. It helps us scaling our third-party grocery offering to make sure that we also have a leading grocery offering, not only a food service and a Dmart service, but also here. And yes, I think this is a very good one. And as I said, we believe in the Turkish market, and we have some competition there. And we will make sure that we step up if need be in this market. But I think this is a fantastic acquisition. It's in the mid million amount. So it shouldn't exaggerate the impact on cash or anything. It's fairly small in that sense, but it's also a very good -- we have a -- we get a very good multiple because you also see that we can do this together. And there is a small earnout for the founding team. So we know that they are also very excited to build something much, much bigger in Turkey with us. Overall, a great asset development in Turkey over the last couple of months. We really turned a corner here. I wasn't particularly happy a few months ago. Now I start to see it's happening. And I'm a strong believer in our position there to further gain market share in our Dmart business, but also winning market share in other business. Then when it comes to dark store or our Dmarts versus third-party, we like both. I love to be a great partner to some of the best local stores as well as global partners such as Carrefour and so on. And I like both. I also like the Dmart side where we can make things much faster, and even further cut down on cost and price versus what it cost in local stores, which is not optimized for delivery. So I think you need both. We want to have both. They both serve completely different purposes. So they complement each other very, very well here. I'm bullish about both but. I should add though it's going to be -- it's not an easy business to drive efficiency on and drive economics. I know it's very easy on an Excel sheet, and many players will show how they can make economics on an Excel sheet. I tell you, it's not as easy as people think. And that's why we see players losing more money than they have GMV. So basically, it will be cheaper to give people food. And on top of that give money because that's what it is. When you have more burn than GMV then you basically give things for free with an extra bonus. We do not do that. And that's why you see that our burn for this quick commerce space per order is very low, and that shows again that the importance and the strength of our platform and our user base, cross-selling there. I think the standard very strong in others. As they scale up, we'll see top of this. And they will realize what we have achieved so far.

[Operator]

The next question is from the line of Rob Joyce with Goldman Sachs.

[Robert Joyce, Equity Analyst]

Daniel, all the very best for the future. So I've got 3. So a couple of them on Korea. So the first one is -- thanks for giving us that second quarter Woowa number. Wondering if you could give us the GMV growth for the first quarter for comparison? And then are you seeing an acceleration in the growth rate in the third quarter as you have launched Baemin 1? Second one, in terms of the operating model there. You mentioned the promotional period. When does that roll off? How long does the promotional period of pricing generally last for restaurants? And do you think on a normalized pricing that I think you hinted at it, but first party delivery will be more unit profitable than the existing marketplace there in Korea? And then the other one is just on Japan. Can you give us an update on your progress in Japan? How you're feeling about that market? And should we expect investments to accelerate in 2022 versus '21 levels in Japan?

[L. Niklas Oestberg, Co]

Thanks. Do you want to start, Emmanuel?

[Emmanuel Thomassin]

Yes. So I can -- I don't have the right number -- the correct number right now on top of my head. What I can tell you is that we had a slightly less higher growth in Q2 compared to Q1 in Woowa. But I don't have the right -- the final numbers here on top of my head for Q1. But as I said, there was a tiny reduction in terms of growth in Q2 compared to Q1. This I know for sure. I will look and then come back to you.

[L. Niklas Oestberg, Co]

And here, of course, there is also some COVID. I know we had a big lockdown in January. So January was, of course, incredibly good in terms of growth. So that affects the whole quarter as well. So -- and then...

[Emmanuel Thomassin]

Okay. I can take if you want.

[L. Niklas Oestberg, Co]

Let's leave it. Let's take -- as I said, the operating model -- so yes, we do that the underlying economics of delivery is at least as good or it is -- we don't see that Korea would be different from any other market. So we are pretty optimistic that it will be a market standard gross profit that we can achieve there. We are, I will say, a little bit below market standard when it comes to the marketplace. So in that sense, I don't know your assumption is probably right. Then in terms of promotional period. So we have signed up restaurants on -- where we said that there will be 3 months, and then we'll discuss. I don't think there will be 3 months, especially since they are in COVID period still and it's not the right timing to -- so we want to be helpful to the restaurant. And so right now, we don't see that as the plan. So -- and we will have to see. But in general, I wouldn't expect that the margin in this year will be -- it will only start moving in the next year, I would say, because we also sign up a lot of restaurants throughout the year. So we should start to see gradual improvement from beginning of next year. Then Japan progress. Yes, very good. It's the fastest growth that we had in any market that we launched. And it's -- yes, we are very hopeful. It's still a long way to go. We still have to work hard. But I think we have gotten a right set up for having a good service offering. We still have some work to do there, but the more we start having the right setup and the right product offering, the better returns we have. And if you have better returns on our investment, it also means that we can start investing more in that market as we see increasingly better returns. So you can probably expect that we will be a little bit more invested there as well versus what we have done in the past.

[Robert Joyce, Equity Analyst]

I was just going to say anything on the third quarter. How that started in Korea post the rollout payment?

[L. Niklas Oestberg, Co]

It started really well. So it started really well. And you can imagine, we now offer a superior service on all aspects. And of course, we also do a little bit promotion to advertise with the new service. We did a very -- we did some very nice updates on our app. So we are very happy. And yes, we are very happy with how we started and how it's continued.

[Operator]

The next question comes from the line of Silvia Cuneo with Deutsche Bank.

[Silvia Cuneo, Research Analyst]

My first question is about future growth prospects. With the last quarter being the tenth in a row with growth of around 100%, you have constantly outperformed your short to midterm guidance of growth above 40%. So looking beyond 2021, can you tell us about how you expect the food delivery market to evolve? And whether high double digit, if not triple digit, growth can still be sustained? Perhaps you could share an update on your online penetration of ordering broadly in your main markets, that would be helpful. Then the second question is about Dmarts. Thanks for sharing the number you added in the quarter. Is the incremental 80 on a quarter-on-quarter basis sort of the rule of TAM we can follow when thinking about the next two quarters of 2021? And also related to that, can you please give us a sense of what markets you consider well covered with Dmarts compared to which ones are still underpenetrated? And finally, about the launch of foodpanda in Germany. Can you please share any feedback from the ground, for example, when signing up restaurants that you used to partner with 3 years ago or so? How differently are you pricing? And how are you pitching your return? And also finally, if you can share any sort of early feedback from users? Are you attracting unique users or perhaps users that already have one of the competing apps?

[L. Niklas Oestberg, Co]

Okay. Thank you. So on the growth prospects. So yes, we have quite massively exceeded our long-term outlooks that we've given or midterm and short term for that sake as well. And we generally like to be conservative on things we cannot forecast. We don't want to be wrong. So I think, in general, things we cannot foresee, we tend to maybe be a tap conservative. So that also is the case now, and I'm going to speak about the future growth because I -- of course, we have tremendous growth. The cohorts are improving everywhere. The new customers you get on the platform are more frequent than the past customers. The longer they've been in a platform, the more the order. So I think there is nothing that tells me that, that would change, but I hope that will continue to improve there. I would also say that in most markets, we only really started acquiring users. And it -- there are still so many users to be acquired. In some cases, it might be less than or it could be 5% or 10% of population outside our service. So we are still very early in the stage of growth or growing. For that reason, I think that we can grow in a very fast pace. And we will not grow in triple digit forever. We have done it now for a couple of years, increased from mid-double digit to triple digit, as I said. That can, of course, not continue forever. Then we should be the world's largest company. And maybe we'll be 1 day, but it will not be in the next few years. So therefore, I think we start getting down to a little bit more normalized growth. And we should expect that from there, it's just the rule of scale. We have the size that we cannot increase year-on-year either. So I would rather say that we'll continue to grow very fast, but you should expect that scale is rather gradually moving that down, but it also means that it's gradually moving down, which means I'm pretty optimistic when you look at the 10-year horizon, that we'll be a very, very large company. Then when it comes to Dmarts, I'm not 100% sure I understood that question. So maybe you can repeat the Dmart question there.

[Silvia Cuneo, Research Analyst]

For sure. What I meant was, given that even in Q2, you added about 80 extra Dmarts on a quarter-on-quarter basis, is that a good rule of time to think about additions over the next 2 quarters?

[L. Niklas Oestberg, Co]

Got it. Yes. So we didn't see the need to increase number of stores faster than what the business actually kind of can comprehend, while still have good economics. Because we need a certain number of orders per store in order to have some economics and make the math work out. So therefore, we increased probably stores a little bit slower because yes, we are already the clear service -- have the best service offering in the market we operated. And yes, so we probably balance that a little bit more to having higher efficiency and more demand per store. So that's a little bit the last couple of quarters. I think as competition is heating up further, and I think we were going to increase the pace in H2, not because we have seen anyone entering our market, but we just increase -- yes, because we are very bullish about the industry. We think it is going to continue to grow very fast in Q3, Q4, and we might front-load to opening more stores to have an even more branding offering just in case. Then a little bit in which markets and so on. And of course, we started the Middle East and then expand that to the rest of the world. I think Asia and Latin America has been a little bit more focused than Europe. In Europe, we have rolled out, but at significantly less scale. And we think that the model works in every market, but also our business is small in Europe. So we have less synergies with our overall business because we have less than -- so less users per capita and so on. And therefore, we prioritized some other regions. But we think that the business model can work in every place, at least if you get scale and size. And yes, hopefully, that answers the third question. And then on foodpanda pricing, and I think that was in relation to restaurant, if I remember right. Yes, we see that probably, on average, we are generally increasing a little bit over time. We're also implementing certain commission caps and so on to making sure that we don't go below a certain level where we don't make economics -- good economics. So I think we have very healthy commission levels to drive good profitability in all markets. And I would say it's kind of over time probably increased a little bit versus decreased. And add a little bit to the question of users, the customers acquired are most likely new users. Of course, there might be some lasting customers going to 2 platforms and so on, but I think the majority of users actually stick to 1 platform. And that's why we've seen it in the past and that's probably true now. And most of the acquisition is coming from new users rather than a customer who have ordered food before with another platform. We are a little bit short on time, so maybe max 2 questions.

[Operator]

[Operator Instructions] The next question is from the line of Giles Thorne with Jefferies.

[Giles Thorne]

I will actually beat-and-raise that and just ask 1 question on Dmart. I recall comments, and I can't remember whether it was on a results call or a sell-side breakfast. But I'm recalling comments a year ago, that the Dmart model wouldn't work particularly well in a place like Stockholm for reasons related to population density and income disparity and the usual types of things. And now a year later, not only are Dmarts doing very well in Stockholm, but they're also now going to Stockholm suburbs like Bromma and then to cities like Lund. And forgive me, Niklas, I had to Google Lund, and it seems to be a fairly small city. So that feels like a substantive change in, I don't know, conditions for having a viable Dmart, which in turn signals that this could be a lot bigger that what we're all anticipating if Tier 2 and Tier 3 cities can support the model. So I'd be interested on your comments on that, and that was it.

[L. Niklas Oestberg, Co]

Thanks. And you obviously know this space very well with the Dmart. I admire your work there. So yes, I would say that we are -- I don't know -- we are happy with the coverage and the focus that it's taken. And you're probably right that the comment that I made before is probably true, but we realized that the market in general is bigger than we thought. So that makes even a country like Stockholm or Sweden suitable for this. And as you've seen probably we have something like 20 stores in Stockholm, I think -- or in Sweden and then to 50 or so in the Nordics. So you're right. We have gone a little bit downstream. We also learned a lot on how we can make this economical, even in smaller cities. But again, I'd like to point out that this is a very tough business model. I think with our size and scale and brand recognition and logistic efficiencies and so on, I think we can do it. But it's not going to work for everyone. Especially when there are several players in 1 market, I think it's going to be very, very tough. But -- and we obviously aim for always be #1, and we'll do what it takes to be #1. So I hope it's going to work out for us at least.

[Operator]

The next question is of the line of Andrew Ross with Barclays.

[Andrew Geoffrey Ross, Research Analyst]

I've got 2, both on Korea, so hopefully quick. First one is on the restaurants joining Baemin 1. Can you talk a bit about any kind of order uplift they're seeing as they move to the new offering? And I guess, ultimately, how many restaurants you think might migrate to the Baemin 1 model? And the second question is, can you talk a bit about the cost per drop on the delivery, I guess, both now and in a steady state in Korean won term, so that we can have a better go at computing where that gross margin as to GMV may end in a steady state?

[L. Niklas Oestberg, Co]

Yes. So we do see a fair number of restaurants who moved into having both Baemin and Baemin 1. We keep making sure like the orders on the Baemin is remaining. And then additionally, we have managed to get them on Baemin 1 and drive orders there. There's also a number of restaurants that we never had, that we can now add. So there is a significant expansion in choice, thanks to this offering. So I think that is also helping us out here. But I think -- yes, I don't want to say any particular number here, but you have a little bit of both. In terms of cost per drop, we don't generally disclose, but I think our hope is, of course, that we can cover our cost per drop with the delivery fee. And I mentioned a little bit delivery fee before. There might then be -- then there are some other costs associated to food delivery as well, such as payment, et cetera. So yes. And then, of course, it depends also a little bit if you keep on -- or if you do 1 drop or if you start doing multiple drops, it depends a little bit on our efficiency of our logistics operation and so on. But I think we've proven that we can make economics even if -- in the most hard markets. So I -- yes, I think that's as much as I can say. I hope that's enough.

[Operator]

The next question is from the line of Sarah Simon with Berenberg.

[Sarah Simon, Analyst]

I've got -- sorry, I've got 2 questions. First one was just any update on your thoughts about subscription model like Delivery Plus? They were talking about that yesterday and your thoughts on that as it relates to your markets. And the second one was for Emmanuel. If we look at your guidance, there is quite a significant step up in the take rate implied in the second half. Now obviously, there's an ongoing shift to own delivery. And there's also the fact that, by far, the fastest-growing part is Integrated Verticals, where the GMV and the revenue are kind of not a million miles away. But is there anything else we should be thinking about? Or is there anything else driving that step-up that we should know about?

[L. Niklas Oestberg, Co]

Yes. So on the subscription model, so yes, we have been trying to get the subscription work for a long time, and we failed for a number of years to get it to work and get it economical. And that's why we never scaled something. I -- after many trials, I think we have something that works really well. And we are scaling that. Of course, as we scale it initially, there might be a little bit costs associated with that as well because we want people to try it out and realize all the benefits. And I think that is happening. And the trick is, of course, to making sure that you don't have worse economics when you have a subscribing customer. I think many players do the mistake that they get the same economics per user, but not per order. And of course, if the scale that user goes from 5 orders a month to 20 orders a month, then that's terrible to not improve your economics on that user. So therefore, for us, it's always been very important that we can get the same economics per order, even if that customer is scaling then from 5 to 20 orders a month or so. So I think we find a way, and I think we can further improve it by making sure that there are special promotion that restaurants can give special promotion as one. But there is a little bit of -- as we work on the offering and making sure that we get more restaurants participating, there is also a slight support from our end, which also has a little bit impact on our gross profit in the last quarter. And maybe we can have a slight negative impact in the next couple of quarters as we scale it up. But overall, the subscription model, I think, we are very happy as it's set up at this point in time. And maybe Emmanuel?

[Emmanuel Thomassin]

So on the take rate -- maybe on the take rate. I think this is a mix effect. I mean there is nothing specific popping out in my mind. I mean that will be the improvement that we see also in the past, where signing new restaurants or new vendors joining the platform, we will then sign them always like higher conditions than in the past. As you know, we are putting a lot of effort on the NCR, the noncommission revenue. We're also looking for improving the pricing with the dynamic pricing. So there's a lot of levers that we are working on continuously, and that should drive this improvement over time, but nothing particular to mention here in terms of very special impact that we are expecting.

[Operator]

The next question is from the line of Andrew Porteous with HSBC.

[Andrew Ian Porteous, Analyst, European Retail]

Yes, a couple from me. So I guess sort of just thinking about the opportunity in gross, I mean, clearly, sort of Dmart rolling out very quickly. But there's a lot of competition in that segment. I am just thinking, conceptually, do you think about grocery as being sort of a must-have from a success perspective in order to sort of support your restaurant business long term? Or do you just think it's quite a separate opportunity and it's sort of incremental to the sort of core restaurant business that you have? And then secondly, just sort of a question around the vouchering in Q2. Clearly, we saw a step-up. I know you're flagging that coming off in the second half. But just wondering what drove that step-up? Are you seeing more competition? Are we seeing a bit higher churn? Or is there anything you're seeing on customer acquisition costs, perhaps going back to more normal levels, that's really driven that increase in voucher?

[L. Niklas Oestberg, Co]

Maybe I'll start with the first one and then you decide, Emmanuel, if you want to take the next one. So grocery as must-have? No, I don't think is a must-have. I think it fits with our strategy of being a delivery super app. I think it does help through cross-pollination type of thing and getting frequency and loyalty and subscription programs, et cetera. But I think possibly the worst combination is to be defocused on both areas a little bit how fast. And I think you will see some players be wanting to play in that space, but they don't really. And I think that's probably the worse of 2. So we're very, very focused on just food. That's probably fine. Or you cover groceries and other things, but then you also have to completely change your systems. You have to -- it's not just add and then like another restaurant. And I think that is what some, I think, players and platforms and maybe those investors believe. It is a very different setup, if you want to do this successfully. And if you don't do it properly, then you're probably better off not doing it at all. Emmanuel, do you want to cover the second one?

[Emmanuel Thomassin]

Yes, sure. So during the first half of the year, we had several initiatives where the vouchering used to support our business. I'm thinking here, for example, of the platform migration, rebranding in LatAm of the global countries. But also, we've done some customer push -- acquisition push in the APAC, with also very selective countries in Europe as well to support also the launch of the Dmart -- the new Dmart. And this -- all these components will expand the development that we've seen in H1. And I mentioned like I think that we are confident that we could reduce -- we can reduce the level of the vouchering to roughly 11%, as usually, this vouchering come getting less efficient over time. But at the same time, and I think it's very important to reiterate this. We will constantly evaluate where we get the best returns, and there might be some temporary deviation as we move into new verticals or even new areas, new cities and so on and so forth.

[L. Niklas Oestberg, Co]

And of course, Emmanuel, say, 11%, we generally think in GMV, and I think that's more around 3%. And I've said it before, and I'll say it again. The efficiency of vouchers over time is also declining. So it has a strong value and you're ramping something up and when you get to a certain size. I don't say that it doesn't work afterwards. It works really well for getting a customer to order again. But you then get more and more reorders from existing customers rather than acquisitions of new customers. And that's, of course -- that makes the return much, much lower. So therefore, the efficiency as a whole is also then declining over time. And it gets -- they start having other channels and other marketing activities that are more effectful than actually on the voucher side. So I'm -- and I think if there is a new offering, great, get people to try it out. Or if you are early in the market, great, get people to try out. But over time, it gets less and less effective. And that's why you see usually the voucher share will decline as a percentage of GMV. And potentially other marketing channel will increase a little bit. But overall, I think, we have seen a healthy kind of marketing, including vouchers all in. It's probably long term more like 3%, maybe even less, if I see some of the other players and peers. But of course, that is when we have full scale that it goes below 3% as a total, and that is marketing and voucher all combined. Right now, there is both marketing and vouchers making that percent a little bit higher in many places.

[Daniel Fard-Yazdani]

Niklas and Emmanuel, do we have time for more? Do you need to drop?

[L. Niklas Oestberg, Co]

Maybe we can do -- I don't know 1 more or 2 if it's short.

[Daniel Fard-Yazdani]

Then, operator, we can take the next question.

[Operator]

The next question is from Clement Genelot with Bryan Garnier.

[Clement Genelot, Analyst]

I have got 2 questions from my side. So the first one is on South Korea. So to what extent do you think ongoing boycott of Koreans against Coupang Eats helps you to build out your market share against this Coupang? And my second question is on demand. Investors are worried about Europe and also U.S. quick commerce players putting some pressure on your Dmarts. But do you see any of dark store players in your geographies apart from Europe? I only had in mind markets in other key geography and LatAm market.

[L. Niklas Oestberg, Co]

Yes. So yes, Coupang is obviously having a little bit of a tough time with boycotts and certain incidents. And I think in general, they've taken a little bit of hit on their reputation also when it comes to food. I think for us, we have been very lucky, building a very strong brand. And I think we had a little bit last year some negative news also partially connecting to transactions and approvals and so on. But you have seen that completely shifting. So if you look at the general perception of our brand, Baemin, in Korea, it's exceptionally good and it's been exceptionally positive also because they are acting with 100% focus on every incident of the ecosystem. That means they care a lot for riders. They care a lot for restaurants. And you can see that and people know that and they feel it that there is a carrying. And as you know, the CEO and Founder of Baemin, I think he also donated EUR 100 million from his own pocket to riders and to restaurants, incredibly generous there. And he keeps on doing a lot of charity work and he's an incredible person, is extremely liked and supported. So they have built an incredible reputation and a loved brand, and we have seen that positive impact to us over the last quarter or 2. And of course, Coupang have had a little bit of the opposite with all sort of issues. But I'm sure they'll come back. It's a good company. So I have no doubt. It's a very serious competitor. We take incredibly serious, and we'll do whatever it takes to making sure that we remain the clear leader in this space. And I think that's -- the market share of Baemin hasn't been touched for years. Even last year didn't really impact their market share and the cohorts and so on. So it's good. And then on the Dmarts, no, we haven't really seen any quick commerce player really in our markets. There might be a few stores here and there with someone. There might be some market. And of course, Germany now there is strong quick commerce players, dark store players. But -- and Germany, we just started and, as I said, we're still -- yes, we still take this opportunity in Carrefour. We mainly launched Germany to making sure that we learn and we can build a product where we sit because otherwise, we cannot build the best global service without being in Germany. So that's why we do it more for ourselves and then we build the best service, and then we'll see where that takes us. But we are also a little bit careful in our investments there. Yes. So not so much to answer straight.

[Operator]

The next question is from the line of Jurgen Kolb with Kepler Cheuvreux.

[Jurgen Kolb, Analyst]

2 quick ones on Dmart. Thanks very much for the slide on Page 21, where you provide additional details on the Dmarts. Just 1 question on the left-hand side of this slide. It looks like the average orders per day of the average Dmarts that you depicted there, just leveling off at around 400 plus, obviously. Is that kind of a sweet spot that's a good number to deal with? Or would you say that just they're taking a breather and with more scale, they can do much better than the 400 plus orders per day on an average Dmart business? Or does that maybe is the limit for the size of the Dmart and the business that you have? That's the first one. And the second one. I forgot when you did that, but you provided us at some stage with a calculation on the Dmart business and the q-commerce business with like an average commission rate like 22%. And some pickup costs and delivery costs or what have you. Given that you've increased your size and the number of Dmarts and obviously, you've become bigger here. Of this scenario calculation, where would you say you've gained superior scale effects, so that the profit contribution is getting higher? Where is the driver predominantly that makes the economics of the Dmarts even better than what you already told us?

[L. Niklas Oestberg, Co]

Perfect. Yes. So on the 400, it's -- 400 is a good level to be, but it's not enough. We need a little bit more per store to make them achieve the profit contribution that we plan on. However, when we come to 400 million, it starts to be okay. And the reason why kind of capping out there is that we're building more stores when we start reaching higher levels. And then, of course, there's an average of maybe some having 300 and some having 700. And therefore, we then make sure that we start building more stores, and that, of course, takes down the average. So it's a little bit us making sure that people more coverage around that store, shortening the delivery distances, which also reduce the cost because if you have 1 store within a couple of kilometers of delivery, it's very hard to make the economics as well. So you need a lot of orders per store in a very small delivery area. But we are set delivering a little bit longer until we reach kind of a sweet spot on orders. So I think long term, this will increase, but it will be always kept down a little bit with the new openings. Then on the calculations that we've shown before. So one of the levers is exactly how many orders to get per store because you have store managers and you have pickers. And if you don't utilize them well in a store, then it's expensive. The same is then we have CapEx costs and inventory costs is one. And of course, the less turnaround you have on your store, more wastage you would have and so on. So I think the number of order per store is very, very important to get right. Then of course, there are some other things making sure that -- the purchasing power. I don't think we have that yet. And we are also not optimized it for it as much as yet because we still have a little bit size to do before we can really go to the CPG companies and other and getting it right. And in some product categories, we will also have to build white label solutions. But that is not the priority right now. And so there are still some levers there that will take some years to get right. But I think in terms of efficiency, logistics, picking, procurement, I think we're doing really well with the size that we have at this point in time, but more levers to come. Then I'd like to add maybe 1 comment on the previous question because I forgot, of course, that we do have a serious competitor in Turkey, so basically overlap there. They started, I think, 4 or 5 years before us. I think we have gained probably -- let's say, we are maybe at 35% or so. Maybe we have reached 40% market share. But let's assume that we're still 35%, 40% market share there against that player in Turkey. We obviously only operated for a little bit more than a year. So I would expect that we will at some point on a fairly soon, hopefully reach that 50% market share. So I think we have good development there. But of course, that is 1 market with strong competition. And if that was the last question or at least the last we will have time for today, then I'd like to thank everyone for listening in and for your support, but also for the full team for your incredible job. I think this was one of our best quarters we have had for several years, both on the top line as well as bottom line as well as market shares as well as expansion. So all of that, so I think a huge thanks to all your work. We are building a service that customers love, a service that has helped restaurants staying afloat during COVID and created hundreds of thousands of job opportunities to riders that value the flexibility that we can offer. So I'd like to thank everyone for your tremendous job and also thanks to all the investors who are supporting us. So thanks, everyone, and hope you have a great rest of the week.

[Emmanuel Thomassin]

All the best. Bye.

[Operator]

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.