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Good day, ladies and gentlemen, and welcome to the home24 Q2 2021 Earnings Presentation. Today's conference is being recorded. At this time, I would like to turn the conference over to Marc Appelhoff. Please go ahead.
Thank you very much, and good morning, everyone. Today, we're very excited to share with you that we continue to show strong growth and healthy order intake in Q2 2021 and the first half of this year. And we will take you through the summary. But zooming out, we increased revenue by 41% again in Q1 -- in Q2, taking the first half of the year to 52% year-over-year and making us now comfortable to guide in the upper half of the initial guiding range for revenue for 2021 and also to spell out the revenue target of EUR 1 billion in revenue by 2023. And we'll take some time today to take you through the steps and the growth drivers we see behind this development. Zooming into some of these highlights here. The revenue growth by 41% to EUR 166 million in constant currency was driven by the open order backlog returning to normalized levels, but that's great news because it means our warehouses are getting filled again, and delivery times and conversion rates return to normal levels. And we're particularly proud to continue to scale profitably at an increasing NPS also in order intake in Q2 despite all the COVID-induced uncertainties in current times and the fact that off-line retail is back to normal, and consumers are traveling and enjoying the new-won freedom again. So the GOV growth in Q2 of 18%, in our view, is great news as we continue with the momentum even in a period where brick-and-mortar retail is back to normal and comparing against numbers in 2020 where we still saw more significant COVID restrictions. In particular, we see our strategy paying off to continue to invest into what we call the first order profitable sustainable growth as long as we remain adjusted EBITDA breakeven and profitable. And so the adjusted EBITDA margin at 2.5 percentage points in Q2, keeping H1 well in the range and in the upper part of the EBITDA guidance range for the year of 0% to 2%. The trading environment since May is obviously influenced by COVID restrictions being eased, by every one of us enjoying the ability to travel and normal life returning and consumers enjoying that. So it's particularly good news in our view that our strategy to continue to invest in customer acquisition delivers continued growth also in Q3 to date on top of the already significant growth in the prior year, meaning that we do not only succeed in keeping the new-won customers that we gained in the last 12 months, but we also continue to actively take share by gaining new customers in the current market environment. In terms of outlook for 2021, we now expect revenue growth in the upper half of the previous guidance range in the range of 28% to 38%. And the EBITDA margin guidance remains unchanged at 0% to 2%. Taking a high-level view of the development also over the 3, 4 years since IPO, we have now grown at an annual average growth rate of 39% at constant currency from Q2 2018 to Q2 2021. And we thus also feel it's the right time for to spell out again that we target at minimum the EUR 1 billion revenue mark on an annualized basis. And we've set now the timing for the end of 2023 for that. And we will use today's business update to zoom in and describe the decade-plus growth opportunity for home24 that excites us still every day like it's the first day of the Internet also for home24. So for that decade-plus growth opportunity, we zoom into Europe. Most importantly, because we let Mobly tell their own narrative since the IPO in February, but also since the European revenue share and likewise a share of the business, of the group, is now at 83%. So we'll start with some looking back and then some looking into the future of that decade-plus growth opportunity that we are tackling in the coming years and quarters. So starting with top line. Q2 '21 is another quarter with sustained growth, but it's not the first one. With Europe now at a 3-year CAGR of nearly 40% since IPO and on a track record to reaching EUR 500 million of revenues in 2021 and group revenues well above EUR 600 million, we've reached a sizable business size that helps us to continue to deliver operating leverage at scale also in the future. And you can see that when we look at the profit development that in parallel to the high top line growth over the last 3.5 years since IPO, has continued to improve significantly, most importantly, with the first milestone of the Q4 2019 adjusted EBITDA breakeven. So it wasn't just a development from Q2 to Q2 '19 to '20, where we had this massive jump. But you remember that in 2019, we had a very deliberate step-by-step milestone plan to be profitable as of Q4 2019, and we've been profitable in every half year since. And the fact that we have now taken marketing investments up in 2021 should rather be interpreted as a sign of strength as we use the available funding to take further market share in a market environment where the addressable market is out there and where we believe it's time to step up our investments in growth. In terms of cash, similarly, after years in 2018 and also partly '19 of platform investments into warehouses, into the new ERP, also with some hiccups in the new ERP in 2018, there is a very steady and reliable development of a positive free cash flow net of working capital impact, and Philipp will take us through the working capital impact in Q2 this year, which are actually reversible to a large extent, so it shouldn't worry anyone. The most important fact is that our working capital remains negative and continues to fund growth as we continue to grow. And therefore, it supports our current business strategy to reinvest every contribution margin that we gain into further growth, and at the same time, keeping the company on an adjusted EBITDA breakeven and on a broadly stable cash position throughout the year. We obviously have some seasonal swings, but you can see that we've been able to deliver very reliable financial results over the last years as well. Now looking back at some of the growth drivers we laid out at the IPO and zooming forward. It's a fact that we can still rely on the same multiple drivers for what we call our decade-plus growth opportunity internally despite having reached some milestones already on that path. And it's not just about the structural growth that's out there and that we have all experienced in e-commerce gaining share in the last year. It's very difficult to actually pin down what the market growth has been, especially in 2020, '21. We very much believe that market growth, if we take out click and collect and normalize it for the truly addressable market for home24, is at around 15% since 2018, 2018 being at the lower end, 2020 being at the much higher level, now '21 coming down again, obviously, based on a very strong baseline of 2020. But in general, we believe market growth in the area of 15%. And looking at the last 3.5 years performance, we have consistently outperformed the market growth by a factor 2. And with market growth, we mean online. The off-line market is pretty much stable, grows with inflation. So we are obviously taking more share from off-line, but we're also standing our ground in the online place. And the good news is that we feel very well prepared to keep this pace because we are invested for further growth when it comes to logistics, to warehousing, to IT systems. We have proven in the last 4 quarters that we actually can digest very significant growth also in the private label pillar of our model, not just on the third-party drop-ship part of our model, which is amazing news and where the team has done a great job in keeping NPS stable and customers coming back. Now in terms of market penetration, because of the platform investments and the extended time we took in 2018, '19, and -- we haven't advanced as much as we wanted on that path, but nevertheless, we've achieved quite a few go-to-market improvements for our consumers in the last couple of years. We introduced payment by installment. We have looked into our 2-man-handling delivery performance and established our own 2-man handling in areas where we see a potential to increase NPS and efficiency at the same time and cost. And we boosted our brand perception and awareness in the German-speaking markets and slowly started the same in France, and we've continued to very selectively roll out our showroom presence off-line and our outlet presence off-line to strengthen brand presence but also to use that as a customer acquisition channel and become less dependent on the online channels. France, the Netherlands, Belgium, Italy, still to come, and we speak about that in a second. But I think the great news is there's still massive potential, and we're seeking to tap into that potential in the future. And it's with great motivation that the team here comes in every day and tackles those. In terms of platform development, we are in a very exciting phase when it comes to especially category expansion in the existing categories and also assortment expansion in new categories. So we've done some efforts in the last 2, 2.5 years. But especially in the first half of this year, we've added more new assortments than in the full year of 2020. And the second half of this year, we'll see a similar development. The very important impact for that is that once -- whenever we add new assortment, the best or the most significant effect on our consumers' decisions and therefore, revenue growth and gross margins, is in the year following the activation because products need to establish themselves and work their way up in ranking. So both in the existing categories, we still have significant room for improvement, not only for white spots in the assortment and especially adding to the high purchase frequency and cross-sell potential categories like boutique, household and home textiles, where we've added a category team at the beginning of this year. But also in new categories, we see massive potential. And we are preparing the platform to become more faster and more precise to also be able to cater to new categories at scale. In terms of shopping journey, we've seen multiple enhancements with positive impact also on conversion rate with a responsive front end with improved presentation where there's obviously still always room for improvement, but the team is really proud of what they've added there. And with the checkout redesign, that's really helped ease consumer purchase decisions in the last steps of the checkout. And when it comes to new technologies, we are already a data-driven company and always strive to take customer-centric, data-driven decisions when we add new assortment, when we add new payment types, but also when we score those or when we forecast which items we should put on stock. And those data-driven decisions and those predictive analytics have helped us steer through the COVID times much better in our view than in the absence of those. And the good news is that as markets become more predictable again, we believe that those advantages will even multiply and become more relevant for us because we can then double down on some of those forecast that in COVID times were difficult to tap into when delivery times are very long or we couldn't restock in the usual restocking times. And last but not least, yes, we've always clarified that we are currently still focusing on our current geographic footprint in Europe, and that remains valid for the coming quarters. So the focus is still very much on DACH, France, the Netherlands, Belgium and Italy. And in the first step, we want to better serve and create a great offering also in those nascent geographies, France, Netherlands, Belgium and Italy. In the second step, there's no reason at all that's from our central warehouses in Germany or from potential geographic warehouses to better serve other regions. We also can and will, at the right time, tap into Central and Eastern Europe, into Scandinavia or selected Southern European countries. So to sum all that up, we're still at the beginning of a decade-plus growth opportunity. So the growth and the relevant size we've gained to date is just the starting point in our view, and we're well on track to reaching that EUR 1 billion target that we set ourselves now also publicly with a few drivers helping to grasp the opportunity at hand and that it's actually quite a reachable target if we continue with our good work and if the teams continue to do the amazing work they've done in the last quarters. The driver, one, is obviously the clearest for everyone to see and understand, especially in the last year, we've seen home and living online penetration rising already. Pre-COVID, it was around the 10 percentage points. Post-COVID, it's probably already on a path to a higher level. But there's no reason that eventually it will reach penetration rates of other consumer verticals towards 30%, giving us a revenue potential and an upside of a factor 3. In terms of continuing to outperform the market, if we just keep our market share, we would just see driver one. But if we continue to take share, there is a lever up and above that online penetration that we are obviously seeking to continue to deliver, and we see a realistically achievable market share in the area of 10 percentage points. And therefore, you can double the driver one with a factor 3 and reach a factor 6. And last but not least, not even speaking about M&A or very remote geographies that we could tap into at a future state as well, but a very realistic third driver is that we best serve the existing geographies we tap into, which is the EUR 100 billion home and living footprint we're currently in. But if we add Central and Eastern Europe, the Nordics, Spain to that, yes, it's easily increased by 30%. So adding another 2 points in factoring our future upside potential. So we are very excited to be standing at this crossroads also after a year of changes and a year of, yes, very positive but also challenging developments for the online space. And what we can assure you is that home24 will continue to consistently pursue the opportunity in the market, that we won't blindly go for growth. We will always aim to combine growth with first order profitability with discipline in customer acquisition. And therefore, we will keep adjusted EBITDA levels profitable and also liquidity levels stable. But most importantly, we strive to continue to create the market, which then helps push online penetration as well, and we strive to continue to outperform both the off-line space and the online space. So with that, just zooming back into current times in the context of the home24 platform continuing to grow, continuing to taking share even in times where the off-line retail has returned back to normal, this makes us very confident that if we keep focused on the opportunity at hand at our own potential and continue to develop our platform, we will see this decade-plus growth opportunity play out very favorably for home24. And with that, let me pass over to Philipp to take you through our Q2 2021 financials.
Yes. Thank you, Marc. From the outlook to the future, let's go back to the current figures. If we look at the order intake in a little more detail, we're very happy to see that the order intake is and remains on a sustainably high level. And following the more than 70% year-over-year growth in Q2 2020, home24 has now in Q2 2021 another 16% GOV growth on top of that. As usual, all figures that we are communicating here are in constant currency. The Q2 GOV growth rates are even more impressive considering that a relevant portion of the quarter compares a normalized consumer behavior post store reopenings and with rather limited travel restrictions in 2021 with a fully COVID-impacted consumer behavior in 2020. Looking at the 16% growth for the group in a little more detail. In a like-for-like view, the growth would have been around 18%. And to clarify what that means, the definition of GOV has not changed. But due to a change in our order creation logic in Europe end of May, we see structurally lower cancellation rates. As a result, our GOV to net sales or revenue ratio improves as of then. And so for the next few quarters, we will hinge with a like-for-like GOV growth figure at a slightly more accurate proxy to predict future revenue growth from our order intake that we communicate. Turning to revenue. We are very happy to report EUR 166 million as our group Q2 revenue. Despite a strong previous year comparable of 49% growth in constant currency, this represents a remarkable revenue growth of 41%, which drives our H1 growth rate to 52%. To us, the achieved growth rates are also a clear sign that next to the continued strong order intake, we see a normalization in our supply chain. Inventories are back on desired levels, and delivery times decreased subsequently. And as a result, we are able to realize a major portion of the previously mentioned open order backlog in Q2. So the normalization, yes, helps us a lot, and I will also take you to the impact on the working capital in a second. The difference in this quarter in constant currency and real currency reporting has a lower relevance compared to previous quarters. And from today's perspective, we would also expect a rather limited impact for the remaining quarters in 2021. Looking at the profitability. After years of continuous profitability improvements combined with sustained growth, home24 is now leveraging the strong momentum to step up its growth investments and to take advantage of the huge market potential offered by the continued increase in online demand in the home and living sector. With the adjusted EBITDA margin of 2.5% and a total adjusted EBITDA of EUR 4.1 million in Q2 2021, we remain fully in line with our announced EBITDA margin corridor for 2021 of 0% to 2%. This holds also true for the 1.4% adjusted EBITDA margin that we achieved for the first half of 2021. With that, we are successfully pursuing our previously announced strategy of reinvesting additional generated contribution margins in further growth. Overall, home24 has now reported a positive adjusted EBITDA for 3 half-years in a row and thus since H1 2020. Looking at the unit economics in a little more detail. It's no surprise that the last year's outstanding market efficiency in Q2 2020 is not the right benchmark going forward, keeping in mind also what Marc said, the strategy to reinvest additional profits into further new customer acquisition. In terms of gross margin, the strong growth of the past quarters on the one hand, led to temporary reduced efficiency of our off-line-focused return clearance processes in Europe and Brazil, on the other hand. And in addition, increased costs for raw materials and import transportation costs were relevant elements that led to a temporary reduction in gross margin in Q2. Now looking at cash. The group's cash and cash equivalents remain high at roughly EUR 170 million. And Q2 2021 is also another proof of the ability to generate cash or at least keep cash levels stable at profitability levels around 3% EBITDA margin, net of working capital effect. If we take a closer look at this quarter's strong working capital outflow, 2 effects are relevant. And to us, they underline the current strength of the business and the financial position. Post-IPO in Brazil, we stopped the anticipation of receivables arising from installment purchases, resulting in a significant increase in receivables. The rationale is pretty simple: to save interest expenses as long as the cash levels are as high as they are now post IPO. What's very important, this mechanism can be revised any time freeing up cash immediately. So we could anticipate all outstanding receivables in Brazil that now increased today or the next day and convert those receivables back into cash. The second element is the earlier mentioned normalization of inventory levels, especially in Europe, and as a result from that, also the normalization of delivery terms for the end customer. While inventories were below the target level more or less since Q2 last year, so since -- yes, we were, I would say, surprised by the significantly increased growth that we didn't plan for. We are now back in the position to market the advantages of our unique private label assortment stronger to our customers as inventory levels are now where we want them to be. The available cash that we have on hand plus the potential additional cash that we could immediately regain from the anticipation of the installment receivables in Brazil leave us ample financial flexibility to continuously expand our market position both in Europe and in Brazil over the next quarters and years. Now looking ahead, we are very pleased to see that our growth momentum remains strong even after the normalization of consumer behavior in our markets. Currently, we are seeing quarter-to-date double-digit growth rates in order intake against the strong comparables in 2020. And as a result of the more than 50% growth IFRS-wise in revenue in the first half of the year and the current order intake, we specify our revenue guidance to the upper half of our initial full year 2020 guidance range, taking into consideration further uncertainty on the customer demand in the second half of the year. So the range remains quite broad, but we are very confident to reach the upper half of our guidance. And that means, more specifically, a revenue growth expectation of 28% to 38% in constant currency for 2021. Guidance on adjusted EBITDA margin remains unchanged. Here, we already have a significantly more narrow corridor based on the strategy that we laid out that we aim to reinvest additional margin into further growth potential. And with that, we will close our presentation and open up for Q&A.
[Operator Instructions] We'll now take our first question from Christian Salis from H&A.
This is Christian speaking from Hauck. So I've got a couple of questions. First of all, on the P&L statement, in terms of gross margins, you already mentioned the decline here. I think it was down by 3.1 percentage points year-over-year at 42.8%. Could you maybe quantify a little bit what's really due to higher sourcing costs? What's due to higher markdowns probably? And also did the consumers become more price sensitive again, now following, yes, this increase in terms of gross margins in the past 4 or 5 quarters? And then also in terms of marketing, marketing cost ratios went up 3.7 percentage points in percent of sales. So could you maybe talk a little bit about the marketing mix? What's the share of paid marketing at the moment? And also looking forward for both metrics, gross margin and marketing, how should we think of that developing in the coming quarters. So that's basically the first set of questions from my side.
Thank you, Christian. Then let me briefly start with the gross margin. What is important to keep in mind, if you compare the figures from last year with this year is that last year was an exceptionally strong demand. So with significantly lower needs to offer discounts to the customers that, let's say, normalized now in Q2 this year. And last year, also the, let's say, off-line return clearance structure with our outlets that we have, that was not impacted as much as we come from a significantly lower baseline last year. This year, now we had the strong growth of the previous quarters with the level of returns flowing in to a large extent in Q2. And that inflow of returns could not be digested in the most efficient way. Therefore, we had significantly higher shares that we sold off to third-party resellers. So more or less, the whole outlet structure was not as efficient as it was last year, also leading to some kind of higher return avoidance discounts to the end customers and some other minor trickle-on effect. So the most important part is the, let's say, lower efficiency on the return clearance. And then the second element, as we already mentioned, we see higher import costs. We passed on a significant portion to the end customer but not the full amount. We expect especially the first effect to normalize and also for the second impact of import costs we are confident that we can regain a large portion of the margin throughout the year.
And before going to marketing, we also -- when we presented the extension and assortment, our midterm margin profile is towards the 50%. So it's not our ambition to gain back what we've temporarily lost with primarily outlets closed, but also obviously to continue to build unique assortment that then can drive gross margins towards the 50% midterm. In terms of marketing margin, I mean that's part of our deliberate strategy to reinvest into growth. And 4 quarters up until Q4 2020, we have each quarter delivered more than 10 percentage points in profitability each year, and we were at a crossroads there and basically decided whether we continue with that and rather target a double-digit terminal EBITDA margins sooner or whether we want to steer for growth and therefore, acquire more new customers to fuel future growth. And if you remember, we always have the complexity in our business model with large baskets that when we invest into marketing, it takes value weighted on average 2 months until the customer converts. And then in normal times, another 4 or 5 weeks until we deliver the products on average with a lot from stock, but also some sales from made-to-order items. And therefore, marketing spend today is on average IFRS revenue in 3 months. And especially in times where we increased our appetite for growth and acquired more customers, marketing ratios rise. That's why we've given the comfortable guidance that we will not jeopardize the adjusted EBITDA breakeven again, but only invest at a very disciplined positive LTV to CAC, so that we're very certain that the investment into new customer returns into profitable growth in the future and also that in any given fiscal year, we don't risk losing our profitability again.
Okay. And then on the current trading, so to what extent have you seen a slowdown in consumer spending towards travel or leisure and away from probably home and living so far in Q3? You mentioned the double-digit growth number quarter-to-date. Should we rather think of maybe in the low teens, 10% to 15%? Or is it still at around about 20%?
Yes. So I mean, the first -- to the first part of the question, I mean, everyone has experienced that consumers, people, we all have massively enjoyed gaining back our freedom, starting with May and then obviously also throughout the summer and the ability to spend more time with friends, with leisure activities, with travel. Looking at the filled bank accounts and the increased savings ratio in the last year, I don't think it's a trade-off of where to spend the money. I think it's rather the mind -- where the mind is at the moment and that we all enjoy spending time outdoors. And therefore, I think it's natural that also in other companies' news flow over the last week, very large U.S. platforms had even negative growth in Q2, that e-commerce evolution just slowed down a little bit. And for us, it's great news that against this trend, we've been able to continue to grow. So we see still the addressable market there, and we see our model continuing to deliver growth at times where others are actually seeing a challenging environment to beat the very strong numbers from 2020. To the second question, we've deliberately been a bit very clear because we see a twofold evolution where the consumer environment in Brazil is, in particular, more difficult than in Europe and a bit more volatile, and therefore, the Brazilian numbers lag the European numbers, and we all know the mechanics of the business. If we give a more precise number than we have pinned down also in the next quarter, it's just very volatile times. And the season with back-to-school is now only starting in the coming weeks again. So we're very confident that we can keep a healthy double digit. For the moment, it's not in the areas we have seen in the last 3 quarters pre-Q2, but there's no reason to believe it couldn't reach similar levels in Q2.
All right. And then the third one on this gap between GOV and revenue recognition, I think you mentioned in Q1 that you have -- that you are expecting some kind of reversal here. So to what extent has this really materialized? And could you maybe quantify the impact in Q2 on sales and EBITDA, please?
So probably 2/3 of the order backlog that we communicated has been realized and -- until end of June and the remainder then in July. So we specified the effect with roughly EUR 12 million in revenue in the Q1 presentation. And of that, roughly 2/3 have normalized within Q2.
All right. And then a final question on working capital. So you mentioned the movements regarding receivables in Brazil, for example. So yes, what could we just expect in terms of free cash flow? What do you expect in terms of free cash flow for the full year '21?
So I think like when we look at the receivables, we save interest expenses by doing that, right? So as long as our cash position remains comfortable, we will not anticipate them because otherwise, we will be paying significant interest to the bank. So for this year, I think it's fair to assume that we wouldn't reverse this even though we could at any date, as Philipp explained. And for our working capital in terms of filled warehouses, obviously, we hope we'll be sold out again and see extra demand in Q4, similar to the previous years. But on the private side, we don't hope for very strong lockdowns again. So we would expect working capital levels to now remain on a lower level going forward, but that the Q2 effect will remain as investment as available stock in our inventories.
To be slightly more precise, on the Brazilian impact, of course, depending on the sales and revenue levels, the impact for the whole year of stopping the anticipation of those receivables can add up to slightly more than EUR 40 million in total.
[Operator Instructions] We will now take our next question from Catharina Claes from Berenberg.
Could you give just a bit more of an overview on the monthly development initiative? It sounds like that, obviously, it was a bit stronger in the beginning of Q2, just to get a reminder on that. And then just finally, the order intake that you now have commented on in Q3, I assume that's also on the like-for-like basis, right? Just for me to get an idea about.
Can you repeat the second part of the question? So the first one was on monthly development of order intake in Q2. And the second half?
So it was basically an overview into generally revenues and development in Q2 on a monthly basis? And the second part of the question was whether the order intake you have now commented on for Q3 to date, whether this was on this like-for-like basis that you have now commented on Q2.
Yes. Yes. So I think -- I mean if you just follow e-commerce commentary in general, we followed a very similar path with the period with a stricter lockdown in April still seeing more elevated demand than once the opening was more back to normal and off-line retail was back to normal. So April stronger than May, June, but all months positive like-for-like against already a very strong 2020 baseline, where also many other e-commerce players have actually struggled in keeping a positive growth. And therefore, the development now is also very encouraging because we've seen with the off-line retail back to normal and with the increased leisure and travel activity, the ability to continue to grow in the double digits, given we are very unprecise here, I can also confirm it's like-for-like, but it would also be double digit without like-for-like. So this effect is a roughly 3 percentage point delta in Europe and therefore, 2 percentage points on the group and will obviously normalize out with the next year. So we all don't know how now back-to-school will play out for us. The good news is that in addition to the newly won customers over the last 12 months, we are in a position to still continue to gain share even in an environment where the focus of consumers is now at the moment, not primarily on consumption, but rather on other activities.
And the only point to add probably keeping in mind that we compare, especially in LatAm, May and June order intake with growth rates of more than 100% in 2020. So especially in Brazil, where the COVID -- where the impact of consumer behavior kicked in slightly later than in Continental Europe, especially those months were extremely strong last year. So yes, that is still a very good sign on the Brazilian performance of 2021.
All right. And then finally, I think -- so if I understand correctly, in the 2023 outlook, that also includes new locations in LatAm. Just one question there. Whether you would want to give a little bit more information away in terms of maybe time line or what kind of are your expectations in LatAm if you back it into that outlook?
Yes. So I mean, in general, we don't really comment on country split. But I think it's also fair to assume that where freedom was won earlier, the dynamics was less pronounced, and we're always much stronger in DACH when it comes to off-line. So obviously, we had a negative evolution in Brazil and in Germany in particular, when off-line retail was closed. So especially in Germany also, we had the positive effect of off-line retail being opened again, right? So we don't comment on details in that split. All countries pretty much traded in a very similar trajectory.
And on the 2023 EUR 1 billion revenue potential there, as outlined with the factors, yes. We have ample room to grow with the -- within the existing country landscape. We -- in the end, it depends a lot on how online penetration evolves. But also in terms of strengthening and outperforming the market growth with our own platform, it's not a must that we need to enter new markets to achieve the EUR 1 billion revenue potential by end of 2023. It is an option, but we will strive for, yes, the best growth potential, yet keeping a profitable -- or a positive profitability level and...
And if you just take the lever of 8x that we've laid out there and multiply it with the current run rate in Europe, you're already at EUR 4 billion, right? So I think the news was rather, we have ample room to grow, and we will grow where we can put our best ROI and value for money offering to play. We have a strong hold in Germany. We have a nascent activity in France, Netherlands, Italy and Belgium. And therefore, obviously, in theory, growth rates in those nascent geographies could and should be higher at a certain stage because they have a lower base. And in addition, at the right time, we will also tackle the countries we could serve from our current footprint and Central, Eastern Europe and Scandinavia could easily be started within a few quarters of preparation because we could serve them from the current footprint.
[Operator Instructions] While waiting for questions to queue, I'm handing it back over to you.
Yes. Thank you very much. With that, we close this morning's Q2 trading update call, and thank you very much for your attendance. If there's any follow-up questions, as always, Philipp and I remain at your availability, so please reach out with any follow-up questions directly. Thank you very much.
Thank you, gentlemen. Ladies and gentlemen, this concludes today's call. Thank you for your participation. Stay safe. You may now disconnect.