Delivery Hero SE

XETRA:DHER

Earnings Call Transcript 2021-Q3

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome, and thanks for joining the Delivery Hero Q3 2020 Trading Update. [Operator Instructions] And I would now like to turn the conference over to Christoph Bast, Head of Investor Relations. Please go ahead.

[Christoph Bast, Head of Investor Relations]

Hello, and good afternoon, everyone. We hope you are well. And thank you very much for joining today's conference call as part of our Q3 trading update.We trust you have all received the press release and the presentation, which we published this morning and also sent out by e-mail. And these documents are, of course, also available on our IR website.And furthermore, this call is being recorded and webcast as well as a replay of this call will be available later today.As always, Niklas and Emmanuel will summarize the most relevant aspects of our Q3 performance. And after that, we are looking forward to answering your questions.And now let me hand over to you, Niklas.

[L. Niklas Oestberg, Co]

Thank you, and hey, everyone. Hope you are doing well. Again, we are super excited to share our third quarter results with you. As always, we are trying to make it fast so that we have sufficient time for any Q&A.I think the vision you know by heart already. We have seen us now also execute on this vision, and we are now by far more delivery multi-vertical than any of our compares or any peers that are at large scale in Europe and America. Today, we basically deliver anything you want.You know the promises we have laid out in the past, on Slide 3. These are still valid, and we continue to deliver on what we promised here.So if we go to the next, then before diving into details a quick recap that we continue to present numbers on a pro forma basis, as we have done already in the previous trading updates. We therefore exclude activities of Delivery Hero Korea for the full year and include Woowa for the entire year.So let's move to the key highlights of the third quarter here on Slide 6. First of all, Q3 marked another quarter of outstanding revenue growth of almost 90%, to EUR 1.8 billion, despite gradual easing of COVID restrictions.Furthermore, we have accelerated our Dmart rollouts. You all know that we are strong believers in quick commerce. Therefore, we opened 174 new stores in Q3, following 84 stores in Q2. Today, we stand at over 900 Dmarts. This makes us the largest global player in the entire industry by number of stores but, more importantly, orders and GMV, at least that is as far as we are aware.Once again, we are extremely happy with what we see at Woowa. In August, they generated more than 100 million orders in a country with a population of only 50 million people; or 52 million, to be correct. They have been massively pushing this market to incredible growth and expanding the gap between player #2 and #3.However, more impressively is that this has happened while significantly increasing our adjusted EBITDA level in the first 9 months. We still operate on promotional pricing. So we are nowhere near what it could become.In addition to this, we have generated a further increase in contribution margin in our own delivery business. If you just look at Asia, excluding Woowa and Delivery Hero Korea, we have seen significant improvement in Q3 and are at breakeven as to vouchers for the first time.We have successfully extended our footprint and service offering through M&A, which will add long-term value to our ecosystem. In Turkey, we have acquired Marketyo, which will allow us to scale faster in the quick commerce business. In Latin America, we further consolidated the market through the acquisition of Glovo, a promising online delivery and quick commerce provider. In Greece, we acquired 2 quick commerce assets from Mouhalis Group, which will improve our product offering there. And in Germany, we led the last financing round of Gorillas, as we believe they have a fantastic product and the best cohorts in the industry. There are some further amazing investments we have made, but for the moment I would leave it here.Last, but not least, we completed the divestiture of Yogiyo, our own Korean business and, therefore, fulfilled the requirement of Korean antitrust authority, KFTC. And that is well ahead of the expiry of the extension period in January 2022.Let's then move to Slide 7. This gives you a very good overview of our outstanding long-term growth trajectory. As you can see, we have generated a GMV of EUR 9.6 billion in Q3. This marked a quarter-on-quarter increase of 14% and proves that we are growing significantly faster than all of our listed industry peers. While they declined on average 4% quarter-on-quarter, we grew 14%. That's an 18% difference in one quarter. We are today, by far, the largest global food delivery company by orders and now also overtaken the #2 spot on GMV.Against this background, I believe it's fair to say that Q3 was another extremely successful quarter for Delivery Hero.With this, let me then hand over to Emmanuel for a deeper dive into the financials. Emmanuel?

[Emmanuel Thomassin]

Thank you, Niklas. Good afternoon, also from my side.Let me add a bit more color on our Q3 group figures, on the Slide #8. So despite the gradual easing of COVID restrictions, we generated strong orders growth of 52% and generated 791 million orders in a single quarter. And if you look at the year, over-proportionate GMV growth of 65% in Q3, you can see how our initiatives to increase the average order value are really gaining traction, especially in APAC, which means Asia, excluding Korea, and in Americas. For example, we have made strong progress in upselling products, we are adjusting subscriptions, reduced vouchers for low average order value customers, we increased the minimum order value, reduced the delivery fee campaign and so on.And also worth mentioning is that our noncommission revenue, what we call the NCR, is now equal at circa 1.7% of our GMV [indiscernible] Q3, and we expect this to significantly grow in Q4. And long term, we believe that this can grow up to 3% to 4%. And short term, there are some mix effects with quick commerce, where we still have very limited focus on this.Even stronger revenue growth in the total segment revenue of 89% in Q3 is supported by our fast-growing Integrated Verticals segment and its high revenues-to-GMV conversion. And just here, a reminder. The total segment revenue is defined as revenue in accordance with the IFRS 15. That means excluding the effect of vouchers and other discounts.I also would like to draw your attention to the fact that the total segment revenues of our Dmarts are reporting in Integrated Verticals, where our orders and GMV are captured in the 4 regional business segments.Now let's move to the Asia platform business on the next slide. Here, we generated strong growth of 55% year-on-year, to 540 million orders. And the over-proportionate GMV growth of 72% year-on-year is mainly driven by higher basket size, which increased in all major APAC countries and showed a steady development in South Korea.In terms of revenue, Asia is our largest segment now, contributing for 48% of the total segment revenues.Looking at profitability, the contribution margin of own-delivery has significantly improved, and the entire Asia segment, excluding Woowa and Delivery Hero Korea, is now at breakeven after vouchers for the first time. As you all know, we usually don't disclose financials on the country level. But in Q3, we have seen the breakeven of the second large Asian market, beside South Korea, on adjusted EBITDA level and after the group costs, and we expect a further improvement in profitability in Q4 and beyond.So now let's move to and have a look at MENA, on Slide 10. The segment generated a high order growth of 48%. And as you remember, the year-on-year growth in the second quarter was extraordinarily high due to the negative COVID impact that we had last year in Q2. If you remember, we had a negative growth of 6% on orders last year in Q2.Even though these restrictions have normalized, we have generated very decent growth this quarter, and GMV grew by 46%, which is almost in line with the order development. Due to the higher own-delivery share compared to Q3 last year, in particular at HungerStation and Talabat, the segment revenues increased by 70%.We also launched a new tech hub in Turkey in September, which will be part of the Delivery Hero global tech team, adding to the current set of tech hubs in Berlin, Dubai, Singapore, Buenos Aires, Taiwan and Seoul. We expect the hub to scale to more than 1,000 talents, which will support our growth and innovation plan.Moreover, we would like to point out the strong performance of InstaShop, one of the largest online grocery platforms in MENA. In September, we generated revenue growth of 120% year-on-year, and also the numbers of stores is more than 3x larger than last year.So now turning to Europe, on the Slide 11. And despite here, despite the reopening and gradual easing of COVID restrictions across many European countries, we generated a healthy growth of 44% in terms of orders and GMV growth by 54% during the third quarter. Supported by our own-delivery business which increased to 32% of total orders, the segment revenue grew by 74% year-on-year in Q3. These numbers are on a like-for-like basis, meaning that this is adjusted for the investments of the Balkan countries, excluding Romania, as we expect this transaction to be closed in Q1 2022.So now let's have a look at the last geographic segment, our Americas segment, on Slide 12. Here, we report a continued healthy performance, with order growth of 48% year-on-year. And moreover, we would like to highlight the over-proportionate GMV increase of 70%, and this was driven by several average order value initiatives we have introduced, meaning fewer delivery fee campaigns, higher minimum order values, upselling, higher basket size as well as continuous improvement in our dynamic delivery fee pricing. In addition, our own-delivery business grew to 88% of orders in Q3, which supported the revenue growth of 82% year-on-year.So now, and finally, moving to Slide 13, here you can see the numbers of our Integrated Verticals segment, which we are super excited about. In Q3, we opened 174 new stores, compared to the 84 stores in the second quarter of this year. And this is a clear acceleration and brings us to a total number of Dmart of 861 Dmarts at the end of September. Our successful rollout results in GMV growth of 200% year-on-year and a GMV run rate of EUR 1.2 billion.In combination with the more than 900 stores we operate today, this clearly makes us the largest players in the entire industry worldwide [ as of ] on our own estimate. Our footprint is mainly in MENA, where we operate around 50% of our stores, followed by Asia, Americas and a small part of the business is in Europe.As a reminder, for those who are new to the story, the quick commerce can be separated in local store business, where Delivery Hero acts as an agent, and the Dmart business, where Delivery Hero acts as a principal. And the Dmart business is captured in the Integrated Verticals segment, which also includes the so-called Delivery Hero Kitchens and some adjacent businesses, like restaurant supply, for example.Local stores are captured in our platform business within our 4 regional segments. Also here, we see greater development as we keep expanding our offering to some great partners. And in total, we serve almost 100,000 local stores, everything from grocery to electronics to pharmacies to florists.Now let's move to the contribution margin slide. In addition to the strong top line growth in Q3, we have also improved our profitability, and we expect this to continue. On Slide 14, you can see the contribution margin development of our own-delivery business. These numbers are before the deduction of voucher costs and excludes Delivery Hero Korea as well as Woowa.On the group level, we have been generating a gradual improvement of the contribution margin, and we expect a further increase in Q4. Looking at the individual segments, our MENA and Americas have enhanced their contribution margin compared to a temporarily weaker Q2, and Asia has even reached a new all-time high. In Europe, the margin has declined, which is due to the own-delivery rollout in Greece. Excluding Greece, the contribution margin in Europe would have been even higher than in Q1 2021.The noncommission revenues on the group level increased slightly, from 1.6% of GMV in the first 6 months to 1.7% in Q3. And as a reminder, these revenues are not including in the contribution margin.So now let's have a look at the development of the contribution margin after the deduction of the voucher costs and jump into the next slide, Slide 15. So on this slide, we see our contribution margin in the own-delivery business after voucher costs sitting at a record high in Q3, and we expect this also to even improve further in Q4. This positive development is also driven by a constant profitability improvement in our segments in Asia, which is now at breakeven.Furthermore, we have continued to reduce the level of vouchering. In Q3, vouchers as a percentage of total segment revenue stood at 10.8%, which is a decrease of 1.5 percentage points compared to the first half of 2021. And [indiscernible], we stick to our previous guidance for the full year 2021 and expect that to come out below the 2020 level, when the ratio stood at 11.8%. And on a GMV basis, this translates into a 3% level.Now we will move to the next slide and the portfolio that we have. So we see here an overview of our large investment portfolio in the global food delivery space. As you know, we are keen -- quite active when it comes to acquisitions, as we've proven in the past that we can significantly scale and improve the businesses that we acquire. To achieve this, we build strong reputation and relationships in the industry. And when it comes to investments, we're convinced that we can leverage our industry learnings, our great reputation and powerful platform to further build out our ecosystem via strategic minority investments.As part of our investments, we further improve our network, we extend our know-how, explore ways to collaborate and even drive consolidation, and we see a lot of long-term value for this and even short term. Our investments have historically generated very attractive returns.And then with that, let me hand back to Niklas for a deep dive on Asia, our largest and very exciting segment. Niklas?

[L. Niklas Oestberg, Co]

Thank you, Emmanuel. First, we would like to give an update on the tremendous success we have made in South Korea, before we share additional information about other Asian markets.On Slide 18, we shoot some light on our understanding and market position in Korea. As you can see on the left-hand side, our active user base has been growing quite significantly over the past quarters, where our main competitors remained stable or even lost market share. At the end of September, our active user base was 2.3x larger than those of our 2 closest competitors combined.As you are well aware, one of our key competitors used the time when we were dealing with the KFTC to introduce their own-delivery service offering. However, since the beginning of this year their position has stabilized and our brand, BAEMIN, has been even increasing its strong leadership. The main reason for this was the successful rollout of our own-delivery service.Turning to this chart on the right-hand side, you can see the active user frequency, and this is rather active visitors based on App Annie. So I want to be clear here, this is external data. And we know that this is not directly comparable to order numbers, but we believe it gives a very good indication of our order frequency relative to competitors.Here you can see that Delivery Hero's user frequency or user visits of 11x is 70% higher than the average of our direct competitors. This is driven by our strong brand, best customer experience and superior product offering.To summarize, we have a significantly larger active user base and higher frequency among our users, which makes us around 4x larger than the 2 of our main competitors combined.Turning then to Slide 19, you can see that we not only doubled down on growth and our own logistics network, but we also see a significant improvement in profitability at the same time. We are still very far from where we believe we can get to within our 100 million monthly orders, with still huge growth opportunities long term. Only a small EUR 1 EBITDA per order would generate above EUR 1.2 billion EBITDA a year at the current size. We are not yet there, and we still have a lot of improvements to make, but progress so far is pretty fantastic in my eyes.At this occasion, I'd like to point out this is just another testament to our ability to do smart M&A, but also improve businesses we acquire. So far, this has been repeated over and over again. I believe we have the best technology and execution team in our industry.Now going to the next slide, it's not only South Korea that makes us happy, but also the APAC countries show a very strong performance. Just for clarification, when we speak about APAC we refer to Asia, excluding Korea and Japan. On Slide 20, we provide an overview of the market position compared to the direct competitors. On the left-hand side, you see that our market share in terms of app downloads is 2.5x larger than our closest competitor in the markets we cover; the lead over the #3 and #4 players, even larger.The higher number of downloads has resulted in a higher active user base. As illustrated on the right-hand side, we have significantly outgrown our main competitors in our core APAC markets, and today we have an active user base which is 1.7x higher than #2.App Annie and other third-party tools can be misleading at times, but in this case the number is being consistent with credit card data and public reported numbers. As referenced, our GMV growth of 78% year-on-year in Q2 was noticeably higher than the main competitors, who grew 58%.However, it's not all about growth, but also about profitability. Hence, we are proud to show that we have made very good progress during the last couple of quarters, on Slide 21. Here, it becomes clear that the investments we have made in APAC are really paying off. Since Q1 2020, the adjusted EBITDA margin has improved by 22 percentage points. And compared to Q2 2021, so last quarter, it has improved by 4 percentage points. This proves that there is a clear path to profitability, while still growing faster than our closest competitors.For clarification, the numbers we provide here refer to APAC platform business, meaning excluding Korea, Japan and Integrated Verticals, but it includes all group costs, in difference to how most of our peers are reporting. And group costs, to be even more clear, as both for our Singaporean hub as well as Berlin. So all group costs allocated.On Slide 23, we have the outlook. And as a result of the strong performance in Q3, we updated our full year guidance and now expect GMV and total segment revenues to come in at the upper end of the previously announced guidance range. In addition, we confirm the adjusted EBITDA margin-to-GMV target of 2%.Let me also make a few comments on Q4. First of all, we had a very good start, but we're also facing tougher comps. Last year [indiscernible] was marked by strong COVID restrictions, particularly during December, and this, of course, provides some tailwind for us. We expect this effect to be much less pronounced this year.At the same time, we are seeing very rational competition in the last 6 months, I think this remains, and we see good room to improve our unit economics in many markets further. This might weight a few percentages on the order growth. If competition hits up, then we may again step on the gas and grow a bit faster again. Either way, we are of course confident to reach the top end of our guidance or exceed it or [ luckily, we may get – maybe even beat here ].On the last slide of today's presentation, we would like to give you an overview of why all of us here at Delivery Hero remain so excited about our company and the industry as a whole. We believe we really have a unique position to drive long-term value and have summarized the key tailwinds for the business on this slide.First of all, food delivery offers a massive growth opportunity and is still underpenetrated across all markets. This is not only true for food, but the entire grocery and quick commercial business. Our current footprint is covering a population of 1.7 billion people in fast-developing markets, which gives us a large and quickly expanding TAM opportunity that is beyond any of our peers.Another important aspect is our strong market leadership. 95% of our GMV is generated in markets where we are clear #1, and 75% of GMV comes from markets where we are 4x larger than the #2 competitor. No other player in this industry can show this. And I think when it comes to our assessment, I believe we are not doing an optimistic view here; I think we have always been very conservative on showing where we are a leader and where we are not. So I think this is hopefully a very representative view of reality. So again, 75% of GMV comes from 4x larger than the #2 competitor. And this is unique.We at Delivery Hero are at the forefront of product innovation. Our entire business is based on superior technology, and we are constantly ahead of the curve when it comes to driving innovation around logistics, quick commerce, subscription, kitchen concepts and many other core areas. Therefore, we're operating 15 tech hubs around the globe, which helps us to continuously innovate our customer experience and improve operational efficiencies.Our superior product offering and better customer experience result in sector-leading frequencies and growing average order values, which helps us to achieve highly attractive unit economics and also increasing [indiscernible].Furthermore, we see a clear path to generating an EBITDA/GMV margin of 5% to 8% long term. As we have outlined already in the past, there are so many different levers we have at hand: increasing scale, better [indiscernible] utilization, operational efficiency through tech and automation, higher basket sizes, less deliberate fee campaigns, dynamic pricing, lower discounts, lower customer restaurant acquisition costs and many other things.And I haven't even mentioned the huge opportunity of advertisement revenue. And Emmanuel has talked about it before. It has grown to 1.7%. I personally -- we believe that this could easily go to 3%, 4% in the long term. There is some mix effect with the quick commercial business where we have not yet been pushing these levers. And as this is growing, it has a little bit of a dampening effect until that is being rolled out. Either way, advertisement, a huge opportunity, and this is only 1 out of the many levers we have for the long-term profitability.Last, but not least, we have shown a strong track of value-accretive acquisitions to our business. We have a strong record for successful M&A at good prices, and we have been using those to further accelerate our growth and help us to expand our market leadership.So that's it from our side. We are very much looking forward to answering any of your questions. Operator?

[Operator]

[Operator Instructions] [ Mr. Emmanuel ], please go ahead.

[Unknown Analyst]

Firstly, thanks for the great disclosure around Asia. I'm sure you'll get a bunch of questions on that, but I'll start with a couple of high-level ones, if I may. So firstly, in only narrowing towards the top end of your GMV and revenue range, it implies materially slower performance in 4Q. And Niklas, you mentioned comps, improving economics and a few factors. But I guess my first question is, if you were to hit minus 2% of GTV as adjusted EBITDA, would you only hit the top end of your GTV guidance? Or do you think you would exceed it? I'm just trying to see how those 2 pieces of guidance line up, effectively.My second question is we saw a return to improvement in contribution margin, and that's obviously thoroughly encouraging. When we think about the factors that impacted 2Q, particularly rider shortages, Saudization, are those issues now behind you? And I think Emmanuel mentioned that you expect further improvements in 4Q and beyond. Could you contextualize where you think that could go through '22 and beyond?And then finally, we obviously saw DASH announce the acquisition of Wolt yesterday. A couple of related questions, I guess. Were you in the running to buy that asset? And how do you view the gap in multiples of yourself versus entities like Wolt? Does that valuation gap effectively leave you constrained from an M&A perspective?

[L. Niklas Oestberg, Co]

Thank you very much. Maybe I'll cover the first one. You do the second one, and I'll also do the third one, Emmanuel, if that's fine for you.So I think -- guiding a little bit on the different dynamics, one being COVID, especially in December, which we have not yet seen. And we still don't know really the latest development in terms of pandemic across the group, what impact that will have, potential lockdowns or curfews and so on. So therefore, we like to be very moderate and conservative in our approach and our communication. We do not want to let any investors down or in any way misleading here. So we're maybe taking a little bit cautious view there on the growth side.I think we have deployed a significant portion of what we priorly kind of gave ourselves as investment opportunities for this year. So I'm not sure if they're going to crawl back anything of that. Of course, with higher growth and better margins, there might be some room. At the same time, as we're making some of these adjustments, let's say, that are driving a little bit better economics, you sometimes have to do a little bit of short-term marketing spending or short-term activities to making sure that we balance a little bit that growth aspect, as well.So I don't want to change our guidance in any way. I think 2% is where we're planning for. And we are planning for the upper end now, with potentially some slight room for possible overperformance if reopenings and so on are not dramatically changing the picture.Emmanuel, do you want to cover the Saudization?

[Emmanuel Thomassin]

The question was around the improvement of contribution margin. So over the last quarters, we continuously focus on the improvement of our contribution margin by capturing, first, the benefit of the economy of scale, but also the improvement of these very important items, as described in our comments. I mean, like, there was the management of upselling, the management around the minimum order value, the management of our customer profile, the efficiency of vouchering and other also, like, delivery fees optimization. So there are many items that we are covering and taking care of that drive to this improvement of our contribution margin.Concerning, rightly so, the aspects or some aspects highlighted in our Q2 trading update, some of the impacts were more seasonal or extraordinary. So like, for example, the rider shortage that we had in Taiwan. You do remember, like, the shortage was due to sudden COVID restrictions. But we had also some structural reasons, I call it that way, like the Saudization or the Omanization.And on that note, and particularly for KSA, the study of the authorities eased substantially since then and the time line and also the depths of the implementation of the measure to be done on the Saudization. And this had a positive impact on the contribution margin.So now the question is when this Saudization will kick in. It will be during 2022. But we also made the experience in many occasions that between announcement, and then sometimes measures following have been quite different and sometimes very -- I mean, in many, many cases, very positive for us. It means, like, less pressure on us to implement the measures.But the impact on Q2 was clearly seen for Saudization and Omanization when we talk about structural reforms.

[L. Niklas Oestberg, Co]

So overall, good development. So there was not a permanent issue with Taiwan and so on.Then on Wolt, if we were in the running, I think it's fair to assume that we are always part of any M&A process. In this case, we quickly understood that having looked into data room and so on that we wouldn't be able to compete on price. And therefore, we dropped out.We think impact should be very limited to us. The overlap is small. In the markets where we do have overlap, I think it's around 5% of our GMV. The biggest overlaps are in Sweden and in Greece. In Greece, we're at least 5x larger, and in Sweden we believe that we are close to 10x larger in that market.And I think that goes for actually every market where we compete. We believe they we're largest; Finland being the market where we are most at par, I would say. And we were smaller in the past. I believe we have now at least caught up, and possibly even ahead, at this point in time.Then I think 2 points on the valuation gap. Of course, it's a little bit challenging to pay a significant amount in M&A transaction if you are not in your own opinion at fair values because, in the end, you give out stock in yourself, you have to raise at unfavorable terms. So yes, it does give you a big disadvantage in large M&A transactions.Smaller things, I don't think it matters so much because, in the end, there is so much -- either you have value in that team and that thing that it won't really turn the needle. But of course, in larger M&A transactions they are massive disadvantage. We don't see any of those, we don't have any big M&A acquisitions in mind at this point in time. So therefore, we don't care that much, or I would say we don't really care at all. So in that sense, I don't think we are at disadvantage. We'd rather focus on our business.

[Operator]

The next question comes from the line of Monique Pollard, with Citi.

[Monique Pollard, Director]

Just a few questions from me, please. If we could start first on the Dmarts, obviously significant acceleration in the Dmart rollout in the third quarter, up 174 in the quarter versus up 84 last quarter. Maybe if you could just give us some indication of how we should expect this to trend in 4Q and whether, over time, the regional split that you gave for 3Q, so 50% MENA, 35% Asia, 10% Americas, 6% Europe, will change materially over time?Second question, also on the Dmart, could you give an update as you did at the 2Q about the average basket size for Dmart versus food delivery, I think it was 1.17x bigger the basket size in June, and whether you still have about 50% of your Dmarts that are generating more than 400 orders per day in the 12 months post opening?And then final question, just on the DoorDash and Wolt tie-up, just wanted to understand what you thought it could mean for Japan, obviously it's a market that you've been investing in significantly and Wolt is also there, and how much disruption that could cause?

[L. Niklas Oestberg, Co]

Okay. So the first one, yes, we did a significant rollout of Dmarts. We have been very happy. And therefore, we see that we have doubled down a little bit. I think you would expect us in Q4, there will be a significant ramp-up.I think as we come until the end of the year, we probably -- we will continue to grow the number of stores, but the acceleration will not happen. We will have then a very good network of stores covering the footprint that we're going to have with enough density and order businesses for having good unit economics. Of course, we will continue to grow that, but I think there will be a clear -- there will not be that acceleration. So the growth will come down as we go into next year. But rather, the order per store will keep going up.So to that question, if I answer Question 3, so as we rolled out now a lot of stores, it means that the orders on those stores are, of course, lower. It takes some time to ramp them up. And that means that this 50% may have changed. I don't have the number at hand, but I could imagine that will have been marginally dropped down, but it should very quickly then move back up to at least that level. And if you look then into next year, that level will be overachieved, hopefully, by far if we don't keep on rolling out Dmarts in the same pace as we've done this year.In terms of average basket size, we haven't -- we are not disclosing at this point in time. Nothing has really changed. So we continue to look for opportunities to further increase basket sizes. But I think at this point in time there is no material difference that is worthwhile highlighting today.And then on DoorDash and Wolt in Japan, it doesn't change much, I guess. I think -- I don't know exactly how they will operate and [indiscernible], but it essentially means there is 1 less competitor. If that is going to be DoorDash, if that is going to be Wolt, brand name or technology is to be seen. But it essentially means 1 less competitor in that market.I hope that answered your questions.

[Monique Pollard, Director]

Yes. Just a final one was on whether the regional split of Dmarts we should expect that to change over time.

[L. Niklas Oestberg, Co]

Apologies. So there will be of course some changes. In some markets, we are closer to a good coverage. In other markets, we still have some way to go. But it will not be dramatically different from one quarter to another. This will be more over the long term. Of course, a market like Asia should have a larger split. And I think we're doing tremendously well in Latin America. And Europe is, of course, a little bit less of a focus of us. We invested in Gorillas, and we back and support them. That means we have a little bit less focus potentially ourselves. But at the same time, we are still very small there. So the percentage might still go up even if there will be less stores in comparison to the other countries.

[Operator]

Next question comes from the line of Adrien de Saint Hilaire, with Bank of America.

[Adrien de Saint Hilaire, VP & Head of Media Research]

So I've got a few questions, please. First of all, can you spend a bit more time discussing how you're able to achieve that much EBITDA growth in Korea despite the shift to own-delivery? And perhaps related to this, given the very sharp improvement that we are seeing in the rest of Asia and the improvement that we have seen in Korea, should we expect that Asia approaches breakeven in 2022? That's the first question.Second question, I know we're only at the Q3 stage, but one of your competitors has provided some guidance on '22, expecting that mid-teens GMV growth. Just wondering if you have any thoughts there.And just a bit of housekeeping, perhaps, but I'm just a little bit surprised that the share of own-delivery went down, I think in Asia and Europe, in Q3 versus Q2. So if you could just spend a bit more time explaining what happened there, that would be super useful.

[L. Niklas Oestberg, Co]

Thank you. So on the EBITDA in Korea, despite significantly boosting here our OD, promotional pricing and scaling up to 100,000 restaurants and all of that, while actually improving EBITDA. So thank you for pointing that out again. I think the team has done a tremendous job, but we are by no means close to where we want to be. We have to focus now a lot on the ODE. There is still a lot that can be done on other aspects of the business. So I would expect that this development will only improve.I think we are now at a very good position to keep growing at good profitable level. We have shown that we can fight very hard and still increase profitability, and we'll continue to do that. And as I said a little bit in my opening remarks, I don't see a reason why Korea shouldn't moving gradually towards a EUR 1 EBITDA per order. And you can count yourself with 100 million monthly orders. That means EUR 1.2 billion EBITDA per year.And the business is not standing still. So we do 100 million orders a month now, but it's still growing fast and there's still tremendous opportunity to grow this business significantly over the next year. So this is, of course, this is where we can continue to drive a lot of profitability or start driving profitability.In question then to Asia, yes, also there significant improvement. And we have indicated this before, that we have so many levers. And as we felt that market has been a little bit more rational, they've seen a little bit less competition, we felt like maybe this is a moment where we can move a little bit on the unit economics, start pulling a little bit on those levers Emmanuel mentioned before. And it's always like a couple of [ cents in dynamic delivery fee ] and improving your logistics a couple of percent; making sure that the worst customers only orders with vouchers, making sure that that never happens; that small minimum order values, that we incentivize that to go away; improving a little bit in our subscription plan, which is, in my view, a fantastic subscription offering.So there are very, very small things. We haven't done anything drastic, but on the small EUR 0.003 here, EUR 0.005 there, EUR 0.02 there, all of that is making the difference that we see now. And this will continue to increase significantly in Q4 unless there is a change in competitive environment. And also beyond.So to your question, does it mean that Asia will be breakeven soon or next year, I think it's fair to assume that we are very close to be there. And as we continue to evolve, I think it's fair for an investor to assume that our food business will go to profitability fairly shortly. I don't want to give a quarter now because that would be inappropriate, but “soon” is probably a good answer.Growth -- and we also want to keep the flexibility. And that's also why we are a little bit hesitant to give guidance, and I hope you respect that, because we know that we want to have the flexibility. So if competitors is pushing down or pushing hard, we will push hard, too. And we need to have that flexibility. We never want to be cornered or being put in a spot where we cannot respond because we gave promises to shareholders. We want to operate in the best for the long term, and that's why we're a little bit hesitant in giving forward-looking guidance, especially on competitivity.Then growth, in teens. You mentioned one of our peers. I think, in general, we should be in a position to grow faster than our peers in the long run or in the short and mid-term, as well. I think we have higher frequency than any other competitor, and that gives a lot of room for growing. I think we are less penetrated. And I think we have the best product and the most multi-vertical offering of all these peers at least. And that's why I do believe that we should be able to do better and grow faster in the mid and the long term and hopefully also in the short term. I can't give you a number on exactly how much more, but I clearly hope that it will be visibly more.[indiscernible]. Emmanuel?

[Emmanuel Thomassin]

Your question to the OD decline. Yes, you're right, there's a slight deceleration of the OD share in Asia, which is due clearly to our market mix effect, where Woowa, in general, has a lower OD than the rest of the region of APAC. And Q3, in general, was a very strong season in Korea, as you've seen, like with the 100 million orders in August and almost 100 million orders in July. So that's the market mix effect.On Europe, I must confess, I will have to dig into in order to explain the reason was the big acceleration. But for APAC, this is clearly due to the stronger Woowa or the market mix that we've seen there.

[Operator]

Next question comes from the line of Andrew Porteous, with HSBC.

[Andrew Ian Porteous, Analyst, European Retail]

A couple from me, if I may. Could you just give us a bit of color on sort of Dmart competition globally? Obviously, Europe, where we sit, this is a very crowded market with lots of names in it. I guess, this year aside, I mean, do you see a lot of competition in your Asian business? Or really just about you guys dominating that space?And then I guess, second question would be, you talked a little bit to some opportunities to be more aggressive at the Q2 stage in the food delivery side of the business. Has that come to pass? I mean, have you been more aggressive? Because you sound like you're a lot more constructive on vouchering competition right now than you were at the Q3 stage.

[L. Niklas Oestberg, Co]

Emmanuel, do you want to cover the first? Or shall I cover the first and the second?

[Emmanuel Thomassin]

As you want. I mean, like, on the competition, I can give some colors if you want to. It's up to you.

[L. Niklas Oestberg, Co]

So the first question, it was a little bit around contribution margin, but also competition involved in Middle East. Could you repeat the first one maybe? I missed that one. Or you take it, Emmanuel.

[Emmanuel Thomassin]

Sure. So in terms of about Dmart competition and the landscape, if I understand correctly, please correct me if I'm wrong, what we see is that you're right. I mean, in Europe regions, this is pretty crowded these days. You've seen a lot of actors, especially probably if you're based in London, you will have seen a lot of new companies taking in. Also in Germany, we see the same evolution.This is less crowded or we don't see the same dynamic in other regions. Here, I'm thinking about LatAm and also, like, the Asian countries, where we don't have the same kind of evolution and development that we see here.Also in MENA, I would also like to say I don't see major competitors. Having said that, there's one exception, Turkey. As you know, Getir started this business on Dmart 5 years ago, a little bit more than 5 years ago. Hence, they're a strong competitor that now is also available in the U.K. and in France, and also now I think shortly in Germany.So really crowded, I would say, summarized in the regions where we are also in Europe, less in the other 3 regions, except Turkey.And Niklas, do you want to -- anything I should add to that?

[L. Niklas Oestberg, Co]

No. I think the only question is we are a little bit more rational or constructive, I think you used the word. And I think, no, not yet in the Dmart space so much. I think it's in early stage. But as we now build such a leading position, I think there are many places where we don't have to make that trade-off, really, because we have such a lead that if someone comes in, yes, then we will probably step on the gas and go a little bit more aggressive. But overall, in the markets where we compete, which is only really one market, Turkey, on a global basis we focus on making sure that we become the market leader, and we are not yet market leader. And therefore, we still have to work hard.

[Andrew Ian Porteous, Analyst, European Retail]

Thanks for that color. The question on the competition side was more on the food side, [ that you seem to be a bit more aggressive on 2 stages ] a bit more constructive on that side of things now. Is that fair?

[L. Niklas Oestberg, Co]

I think that is probably fair, that we see like we are in such a strong position in the food side. And it's -- when we reach a certain size, being aggressive or constructive doesn't makes such a big difference to growth. I mean, if you go very aggressively you can take one more market share or you lose one market share. But at that size, it doesn't really matter if someone goes aggressive on vouchers and discounts. They will get a couple of users, and they will disappear.Look what happened in Korea. Coupang probably spent hundreds of millions trying to make a dent in the market. And of course, they got some market shares. But for them to maintain market share, only to maintain market share, it's going to cost them hundreds of millions.So therefore, I think we are coming to a size in the space where we can focus even more on ourselves and what we do, and maybe a little bit less on what competitors do. But of course, if we see someone of size challenging us, then we will fight back. And if not, then we might be able to be a little bit more constructive.And I think maybe also, we often sometimes get asked about Japan and Germany. I think what we always said here is that we will take it very slow and step-by-step, especially with Germany, where we grew the product or we started the country to be very having a product that we can use, that we can order from, that we can innovate, that we can test. We think it's going to be the best product in the market. And then we thought, well, if we have the best product in the market, why not give it available to everyone. And then we're gradually going to grow from that basis.But there is no plan of “let's make sure we win the market in the next 3 years or 4 years.” We'll see. We play this challenger game here. We play the efficient, smart, good player, a little bit of a, call it, #2, #3 player, but still, hopefully, very good unit economics. And then we can always decide in 5 years if we want to double down and win this or not.I think in Japan, maybe we invest a little bit more there, but same philosophy. We are not going to try to win this market in the short term. We're going to fight this market by having the best products and gradually step-by-step taking market share. And that could take 10 years, it could take 15 years, but it's a little bit less of -- longer time, but less spending.

[Operator]

Your next question comes from the line of Rob Joyce, with Goldman Sachs.

[Robert Joyce, Equity Analyst]

I've got 3. So the first one, just to confirm on the fourth quarter guide, I think implying a Q-on-Q decline in GMV, is this a conservative view on the next six weeks? Or is this a slowdown you've already seen in the sort of first 6 weeks of the quarter?Second one, sounds like you're pretty comfortable the food delivery business should be profitable next year. Just building on the comments you made around Germany there, do you have any guide on that EUR 550 million that's been on quick commerce, Germany and Japan, those investments this year? Do you have any idea where that would go to next year in 2022?And then, again linked to that, just on Germany, now you've got your stake in Gorillas. You've obviously made a lot of comments, just made comments there on the crowding of the European space. Any changes in your thoughts on the investments going into Germany?

[L. Niklas Oestberg, Co]

Sure. So on the first one, no, we have not seen a decline. So we had a good start of the quarter. But we're also coming from a very good Q3. So we should keep that in mind. I will be very surprised if we end up with that decline quarter-on-quarter on the GMV side. But again, we don't know what happens with COVID restrictions and we have Vietnam, more or less, shut down. We can't do orders there. So of course, that is weighting on us.We have a little bit also impact at Taiwan and a couple of other places had a very positive outcome of lockdowns in Q3. That helped us a little bit there. Those have been completely removed. So there are some removing of restrictions that could potentially be a little bit of a tailwind.But in general, so far, the quarter is very good. But on -- so I wouldn't expect that it would be a decline quarter-on-quarter. There will be a drop on year-on-year. That's what we expect, especially because December was so incredibly good, in particular, in Korea. And that was of course also driven then by COVID restrictions, lockdowns in Latin America. So right now, we feel good.In terms of the spending on new markets, quick commerce, we do not give any guidance now. We're still -- it's still early stage. And therefore, we need a lot of room and flexibility. We don't know what competitors will come in to the quick commerce space in the markets where we operate.You also have to see the results and returns that we see in customers, lifetime values in customers in places like Japan and Germany to see at what level can we rationally spend money with a return. And that's -- so therefore, I can't really give guidance on that at this point in time, but I would assume that it's not going to be less than this year. And we are going to improve profitability in our core business, and I wouldn't expect the new markets in quick commerce yet to have turned the investment curve.When it comes to Germany or, I think, Gorillas, as you mentioned, first of all, we've been extremely positively surprised by the performance since we invested. That is not thanks to us. That is simply that the business has done better than what we expected. We knew that it had the best cohorts and user frequencies of all players that were looked into. And that has not done worse. And this year, I should say, this is on single-digit [ partial ] usage. So this is not 60%, 70%, 80% [ partial ] uses as we've seen in other places. This is single-digit incentive of GMV. So very low incentives and very good customers, loyal customers.Then of course, we think that -- we believe in that company, but we also see certain benefits of working together. And we will look into those benefits and see what kind of partnership that we can potentially do here. But nothing done or signed, but we're looking into how we can benefit our customers as well as Gorillas' business at the same time, and hopefully then also save our own costs in expanding into a lot of warehouses they already have.

[Operator]

Your next question comes from the line of Andrew Ross, with Barclays.

[Andrew Geoffrey Ross, Research Analyst]

I've got 2 left. First one is a specific one on Korea. I think the share of delivery was 8% in June. What is that number now if we look at October?And then the second one is a bit harder, in Asia. Can you just go through the moving parts of what rising COVID cases did to the Asian business in Q3? Because there's quite a lot going on there in terms of country mix, AOV impact on delivery economics, et cetera. That would be helpful.

[L. Niklas Oestberg, Co]

Sure. I think the first one is [ 3 seconds ]. Quickly say, it has increased. It is still probably a little bit still lower than what we would have initially expected. So it is a little bit above 10%. I think that is also testament that the marketplace is very, very good, because we offer 100,000 restaurants great service, but customers are still very loyal to the marketplace here. I think long term, it's going to dramatically change, but it's probably going to take longer than what we initially thought, I would say.Then on the COVID. So it's been a little bit small impact here and there over the last 1.5 years. It goes in, goes out, goes in, goes out. But the difference between in and out or restrictions or not restrictions is fairly low, with the exception of, I would say, Vietnam, where there's a complete lockdown in Hanoi and so on where we are strong. So we more or less -- that is easing up a little bit, but it's drastically worse than our business in that market for the time being. We have seen in the past in other markets once it opens up we usually come back very quickly. But still restrictions there.I think Taiwan was a place where we did see some positive momentum because of tougher restrictions during parts of Q3.Apart from that, there are small things here and there, but nothing material.I think in terms of economics, Q3 gets a little bit negatively impacted actually with -- Q2 getting negatively impacted on gross profit due to Taiwan flowed into was Q2, Q3, and that's happening. But I wouldn't say this is a material driver at this point in time into this unit economics [indiscernible].

[Operator]

Next question comes from the line of Giles Thorne, with Jefferies.

[Giles Thorne]

My first question is on dark stores. And Niklas, I'd be interested to hear your view on the franchise model for dark stores.Second question is on Greece. And I'm curious why you bought a 500-chain convenience store business. That feels like quite a big departure from previous capital allocation.And then the final question, still on dark stores, is that we've now seen, it's probably happened elsewhere, but it's finally bubbled into the public domain, a dark store partnership for a general retail, and I'm thinking of Glovo in Poland here. I'd just be curious if you thought that is something you would be interested in doing. Again, a dark store for general retail or 15-minute delivery of general retail.

[L. Niklas Oestberg, Co]

So on the franchise model, I think economically, of course, early stage, it makes it look very good. You basically let costs being absorbed by someone who's willing to start a business and invest here. So there is a couple of years there where you save money, obviously, and move that off your balance sheet. The question is still, can you then over time, over, let's say, 1 year or 2 years, start giving enough business and enough economics to those franchise takers such that they stay on board and that they want to keep running it and that they make profit? Because in the end, if they don't make profit they will not want to be franchise owners any longer.So I think on a short term it looks fantastic. Long term, you still have to make the economics. But of course, it will take a couple of years until it comes onto your balance sheet.We are obviously also looking into that. And we have launched also some number of franchise models, similar to what Getir is doing, similar terms [indiscernible].I think that some markets might be the right way. In other markets, it may not be. But economically, it will look very attractive at the beginning of this.Then on the Greek acquisition there. Yes. But it's not clear from when you look at it because they do have 500 or so kind of kiosks there with all having around 1,000, 1,500 SKUs. So it's not always so small, but it can actually be more than just ice cream and a newspaper.But what they also have, they actually have 45 or so convenience stores and have distribution centers and have extremely good terms and conditions for procurement. So therefore, what it does give us is 40, 50 convenience stores which are suitable for our business, and it gives us distribution centers and procurement capabilities and we could technically also deliver from these kiosks, which have a high density. We can also work on the inventories in the kiosks such that it also works with delivery. Those kiosks are not necessarily the full-fledged kind of Dmart 3,000 SKUs that we have, but at least there will be a lot of them, and we will have easily delivered things in a fast manner from them.Those are -- again, it's a franchise. So from that point of view, we are also not operating those kiosks. So from that point of view, I think it makes a lot of sense for us. It really moves us fast on the Dmart side, the procurement side, cost side. That's one.Then on the third one, with kind of Dmart as a service, is what we call it, and we have also done that. As you have come to known, we are usually the first one to see innovation and testing innovation. In some cases, we realize quick that something doesn't work, and we step away from it. And in some cases, when we see that it works, then step on the gas and expand it, such as the Dmart [indiscernible].We see a good possibility to do Dmart as a service, but we are still in the early stage and working with different partners to help them there.

[Operator]

Next question comes from the line of Sarah Simon, with Berenberg.

[Sarah Simon, Analyst]

I've just got a few. First one, just wondering your thoughts on comments made by a competitor about the own-delivery business being more sensitive to COVID restrictions being dropped (i.e., that marketplace is more resilient). If you could talk about what you've seen, that would be helpful.Second is on Dmarts. Given that you've got to have locations for those Dmarts in density populated areas, is there -- obviously, there's a rush to get customers, but do you believe there's a real first-mover advantage because there's a limited number of locations where those can be sited?And then the third one was just a clarification. Niklas, you said you didn't think that there will be a quarter-on-quarter sequential decline in GMV in Q4. But I think you said there will be a decline versus Q4 last year. So I just wanted to check what it was you actually said, because that's not really consistent.

[L. Niklas Oestberg, Co]

On the OD being less resilient, I will say no. I think there is some truth to that, but a typical delivery restaurant they will stay open during the whole COVID lockdowns, while a normal restaurant with mostly in-dining might have shut down. At the same time, a lot of those in-dining restaurants when they last customers still needed to stay alive. And therefore, they opened own-delivery during that time. So I think, net-net, there is probably a similar resilience between OD and marketplace.On Dmart locations, the kind of first-mover advantage, yes, there is some degree of getting the locations. But I think by far more relevant as a first-mover advantage is that you need a lot of scale per store. If you only do 200, 300, even 400, it's not enough. You need to drive these orders per store higher. You need to get to the 500, 600, 700, or in some cases maybe even 1,000 orders a day, and we do that. So that's when you start driving economics. Before that, it will be a tough time unless you have very limited SKUs or a very small store, et cetera, et cetera. But that is also not a competitive proposition towards customers. So if you want to have a relevant Dmart store, it needs a lot of orders and it needs to be significant, a number of them, because otherwise delivery distances gets too long, which is bad customer experience, but also the costs get too high.So therefore, you need a lot of stores in a city, and you need a lot of orders per store. And if you are the second player coming in, you will never break that Catch-22. You will not get enough stores, you will not get enough orders, it will cost you immense amount of money to advertise and building and so on, while a first-mover will have this advantage.So that's why I think it's a massive disadvantage anyone coming in late. That's why it was also important for us to build a strong coverage very quickly, building our service offering, increasing our SKUs, such that anyone who comes in will be massively disadvantaged and, I think, not very successful.Then the decline. What I said is that it will not be -- I will be very surprised if there's a decline quarter-on-quarter. It may not be as much increase quarter-on-quarter, given that we just grew 14% in this quarter. But I will be very surprised if there's not a growth quarter-on-quarter, given how good the start has been in Q4.What I did mean on year-on-year is that year-on-year will go down. That is because December last year was so good, in particular, with COVID restrictions. So year-on-year will go down.

[Sarah Simon, Analyst]

Okay. Year-on-year growth will go down.

[Emmanuel Thomassin]

Not in absolute numbers, but in growth rate.

[L. Niklas Oestberg, Co]

I think shall we have 1 or so questions left?

[Operator]

The next question comes from the line of Andrew Gwynn, with Exane BNP Paribas.

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

A bit of an epic session. So I'll keep it to just one. Just going back to South Korea, obviously very good profit progression in the first 9 months. I'm not sure if that was significantly different to where you expected. But obviously, very good progression there. The investment in own-deliveries may be a bit less than you expected. Yet the overall guidance still at minus 2%. So I'm just wondering what else has moved to compensate? Or actually, have I misunderstood and South Korea has done what you expected?

[L. Niklas Oestberg, Co]

Korea, as I said, is doing really well. I think we're still so early here, and we are still commercial pricing. We still don't have an NCR product. We could easily -- especially in a market like Korea, we should be able to drive easily 3%, 4% on an NCR product, especially [ CPC or Joker ] or other things that have been developed and innovated on. We don't have any of that. It's close to 0. So there is still so much to be done.We haven't installed our [ Open List ] over the last 6 months, which is our marketplace product, because we have been focused on getting 100,000 of OD restaurants on board. So there are many things that we didn't do last year or last 6 months, intentionally. We have to pick our battle. We have to focus. We have to get our resources on the most important thing, which is to turn the tide against our second, maybe third, competitor, which is Coupang, and the costs that came from that. And therefore, that was the key priority.If we see that this is a little bit more under control, then we can work a little bit more on the other aspects, and that's why I think profitability should then also even further materially go up. So I think this was just a first small taste, hopefully, on what to come.Then I think, yes, [indiscernible] and other things moving the right direction. But at the same time, we did invest aggressively in [indiscernible] during Q3. We still invest aggressively to making sure we keep our share. We are following our plan, and the plan was to be at 2%. And yes, I think we still stand there around that level.I think there's clearly room for improvement next year, especially because then we carry in and that's important. As we move doing the small-slice improvement on gross profitability and contribution margin, there is sometimes that we overcompensate a little bit with this ability, as one. Gross profitability has a long-term effect that once you are there, you are there and you will benefit from that profitability, while short-term, let's say, awareness or so on is those costs are more temporary. But it bodes well for the future.So can we do the very last question? I think we're over time, but I don't want to waste everyone who has stayed here. So last question, please.

[Operator]

The last question is from the line of Clement Genelot, with Bryan, Garnier.

[Clement Genelot, Analyst]

Only 2. The first one is on Dmart. Would you be willing to, let's say, consider a partnership between Dmart and some food retailers to get access to oversupply and also private labels in order to accelerate in several regions, such as Europe, [indiscernible]?And the other quick question is on inflation. Do you see any food inflation, I mean, in some regions with restaurants raising prices of their meals and potentially harming the consumer demand?

[L. Niklas Oestberg, Co]

So Dmart -- and we work very closely with a lot of big retailers, and we want to be the best partner. And the offering that we have now is so we can list them on that platform, they can deliver via us much cheaper than they can do themselves. We really care for that relation, that partnership.Then what customers really want to have more of this top-up [indiscernible], that's what Dmart covers. So the Dmart is really a complementary product to our customers, and it doesn't really substitute to more the shopping basket and so on that they will do [indiscernible], et cetera. So therefore, that's how it's split.But we also realize that some players like, let's say, Carrefour and others, will feel like, “Well, we also want to be able to deliver fast and having the economics,” even if its baskets are small and so on. And we want to be the best partner. So we will work hard to help them there and also then build Dmarts for those retailers who wants to build it. We have no incentive or no -- we don't want to compete with them in any way. We just want to build a good consumer proposition. If we do it, if we do it with them, it doesn't really matter. We just want to build the best consumer experience. For that, we need the Dmarts, with them or we do it ourselves.In terms of inflation, yes, you see very quickly that if there is inflation in an economy you will also see inflation in food prices. The good part of the marketplace is that it's fairly -- we charge a commission. So if there is inflation in food prices, then there's also an increase in the money that we make. Then you can argue there's less value of that money, et cetera. But we are pretty inflation-hedged and have seen that in many cases before. We had Turkey in the past. We had Argentina with hyperinflation. Those businesses are doing tremendously well. It grows faster than ever on a GMV basis, in euro terms, not in local currency, but actually in euro terms.So the inflation hasn't really -- it can short term impact us, but very quickly prices readapted and consumers will also get used to new prices, as well. We don't see a reduction in consumer usage. Rather, the opposite: prices in countries where countries are in inflation have done extremely well in euro terms.I think that's it. Thank you very, very much, and thank you, everyone, for listening in. I know this was longer than what we planned. I'm very sorry for this. I hope -- we just want to be transparent and share all the details.Again, thanks for the tremendous support. It's always a pleasure talking to you. I think Q3 was another successful quarter for us, with an outstanding top line but also start moving on the gross profitability side. There was actually at Dmarts we have improved on some profitability in other areas. I'm looking forward to Q4 results.And last, but not least, enormous thank you to the working Heroes. You are fantastic. You really rock. And thanks, everyone. Have a good and safe day.

[Emmanuel Thomassin]

Thank you, everyone. Talk to you very soon, I'm sure. Thank you so much. Bye for now.

[Operator]

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