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Good day and welcome to the home24 Q3 2020 Trading Update Conference Call. Today's conference is being recorded.At this time, I would like to turn the conference over to Mr. Marc Appelhoff, CEO. Please go ahead.
Thank you very much, and good morning, everyone, and welcome to our Q3 earnings call. We're very glad to welcome you this morning and report another quarter with very strong financial results and also a great outlook. As you might have read, we upgraded guidance last night.But let me start with stating again how grateful and proud we are of the entire home24 team that has continued to work together to best support our customers and industry partners in the midst of the pandemic. And also, we remain vigilant, most of us remain in remote work setups, in terms of health and safety and to keep -- try to keep employees, customers, communities as protected as possible. And we're also very happy about the development of a vaccine, even though we've been benefiting from some of the demand trends, but I think that's great news in general.So without further delay, let's dive into the details and look at the summary. So overall, our GOV grew by 45% in Q3 2020 at constant currency, which now brings year-to-date, after a very strong Q2 and Q3 numbers, to 41%. Most importantly also, the momentum remains very high. As we've seen, the order intake to date in Q4 at above 60% currency-adjusted growth. So it's been an uptick in Europe and a slight downturn in Brazil as Southern Hemisphere consumers are heading into summer.In terms of IFRS revenues, Q3 continued with a very strong currency-adjusted growth and even beat Q2 at 54% year-over-year, partly also because the leftover Q2 GOV was realized in Q3. And year-to-date, we're now at 38%. But most importantly, this growth is also falling down to profitability, and we've seen another quarter with 13 percentage points in adjusted EBITDA improvement year-over-year. I think that's now the third or fourth quarter in a row with double-digit profitability improvements, which led to an adjusted EBITDA margin at 4% in Q3 and now 3% year-to-date.For cash, the same positive picture. We had a slight positive Q3, even though we did repay a facility in Brazil, which also now takes us, for the first time, to a 12-month cash breakeven.But also looking forward, the great news is that the growth was not only fueled primarily by repeat activities, which was strong as well, but we've significantly added new customers. And those increased by 400,000 to just below 2 million in the last 2 quarters. And that is a number that we took in the past 2 years to achieve. So that's a very solid foundation and the springboard for future growth.In the current times, our key priority remains not only the health and safety of our communities and customers, but most importantly, also to keep supply and operations up because that's the most severe impact we see currently on our business that with home and living benefiting in general and demand being up and at the same time, supply chains -- raw material supply chains being partly disrupted or delayed or just being built up again. The supply chains end-to-end are just much more difficult to manage in terms of timing.And as already hinted in the introduction, we did upgrade our guidance last night based on current trading and also the October bookings. So revenue growth is now expected in the range of 38% to 42%, also especially considering slower realizations of the current order intake, and adjusted EBITDA margin accordingly now in the range of 2% to 4%.Before we go into the detailed financials, let me take you through a few focused business update slides that fit the story and also the development of the last 2 quarters and basically take you through how we've also steered the company in the last 2 quarters.So as already mentioned just now, we increased our active customer base in 2 quarters by 400,000. That's a leapfrogging development over the past 2 years. And I think the future relevance for this is that this is now a springboard for future growth, especially as we see repeat behavior develop favorably as well in the current market environment. So the continued shift from off-line to online, combined with our mass market appeal, will support future customer revenue growth potential for many years. But those 400,000 we collected in the last 2 quarters are very concrete repeat potential customers for the next 4, 5 quarters as well.If we step away from just the sheer acquisition of new customers but also then how we cater to those. We brought you this Slide 5 where we reiterate that we've deliberately traded growth for customer satisfaction, especially in Q2 in Europe, even if this meant that we did not grow as much as we could have. So you might remember that in Q2, marketing year-over-year was negative and Q3 now saw a slight uptick. But in general, we did not exploit the full growth potential to ensure that the customers we serve are actually very satisfied. And you see that, that chart on Page 5 demonstrates that the strategy is paying off as we're able to hold NPS stable on a high level even through the high-growth quarters of Q2 and Q3 and also to date -- Q3, Q4 to date is on that very stable high level that we achieved at the beginning of the year.Our fulfillment platform demonstrated that it's gaining profitably. And the good news is that there is still vast upside potential to the capacity. We could probably double the current volumes without a meaningful CapEx. So we believe the NPS, combined with a significant increase in active customer base, is a great basis for solid future developments.We started preparing the supply chain and warehouse teams for COVID impacts already starting in February, implementing safety measures and trying to get smarter at predicting the uncertain demand and supply environment. Since then, we regularly, on a weekly basis, updated and upgraded our rolling forecast using purchasing -- used for purchasing and operational capacity planning. So we did iterate in very short learning cycles to adapt to the new situation. And this allowed us to recover on inventory levels from low points during the post -- during or post the lockdowns.So we've shared here with you that in Europe, we've seen inventory levels recover 25%; in LatAm, even 40% from a low point. However, this is still not sufficient to prevent significantly longer delivery times year-over-year due to the strong momentum, not only in home24 but also in the industry. So significant pressure on supply chain persists, and we continually monitor and proactively manage the impacts, especially on delivery times, changing the promised delivery times on our websites but also trying to and get in the goods as fast and as reliably as we can. And this will continue to influence especially revenue realization in the next month. So when we speak later on also about our guidance, we can quite consider it in taking this into account and especially also not jeopardizing our NPS goals.And yes, a special business update, which is looking at financials. But we wanted to take out a few KPIs from the financial update to just highlight that we've been able to keep a high efficiency on COGS and fulfillment and SG&A since reaching this milestone of adjusted EBITDA breakeven in Q4 2020. And we even achieved continuous gradual further improvements. But marketing is probably the most volatile and fluctuating ratio, obviously, not only due to the seasonal pattern in marketing with investment quarters in Q1 and Q3 and harvesting quarters typically in Q2 and Q4, but especially also, as we now will gradually update and increase our appetite for growth.In Q2, we obviously saw a windfall benefit in marketing ratio as we won many new customers more efficiently than -- without a demand boost through the pandemic. And yes, as mentioned previously, we even decreased marketing spend year-over-year. In Q3, we've now gradually stepped up our spending again as we saw NPS and operational efficiency perform well. And going forward, we will pursue our long-term growth strategy and gradually step up our marketing investments. However, we will not jeopardize the adjusted EBITDA breakeven.And looking at the stability and the reliability of our COGS, of our fulfillment, of our G&A and also liquidity, we feel we're quite well prepared to now tap into the market potential that is, in general, a significant increase through an increased online penetration, even once the extra COVID-induced demand will return to more normalized levels. But we fundamentally believe that the online penetration will remain increased as customers have become used to tapping into the e-commerce market opportunities.So now looking at our Q3 financials in a bit more detail. As mentioned, the order intake momentum decreased a little bit in Q3. So from 71% constant currency in Q2, we posted 45% in Q3, which takes full year to 41%. As also mentioned, Q4 has now seen an increase in the momentum.And if you look at the geographies, it's been a development where, going into the first lockdown, Europe saw a momentum faster than Brazil. Brazil was then accelerating through the Southern Hemisphere winter faster than Europe. And Europe saw a significantly elevated level but not a high dynamic as in Q3 -- Q2. And it's now reversing again. So as Europe is heading into the winter, and we're now seeing the second lockdown waves in our markets in Europe and Brazil is heading into the summer, so the momentum is slightly reducing there.So no surprise that growth was primarily driven by the high numbers of orders placed with a larger active customer base. And I think it's also good to see that the basket development is very, very stable, and in euro terms, primarily influenced by the increased currency impact. So constant currency, the basket sizes are very, very stable in Europe and in Brazil.However, the FX development has continued to weigh on our real currency financials as the exchange rate of the euro to the real has year-over-year significantly increased. So we're now at around BRL 6.3 for the euro. And yes, we hope, obviously, that this will stabilize, but we also don't have a crystal ball where this will go.If we look at how GOV now translates into revenue. You saw that Q3 has actually seen even a slightly higher IFRS revenue growth than Q2, both driven by strong momentum in Q3 but also with the order backlog, particularly in Europe, converting into IFRS revenues, whereas Brazil has the counter effect now in Q3. Europe has pretty much brought down the order backlog, and we were very clean going out of Q3. Brazil, with a very strong momentum in Q3, still had some order backlog going out of Q3. And for now, we did not see any relaxation of the situation. So the delivery and replenishment times in -- especially also in Brazil, remain inflated due to supply shortages on the raw materials and manufacturing capacity constraints. So we believe this will just continue for another few months. So broadly, Q4 growth was stronger in the Latin America segment. And yes, as also mentioned, this is now reversing again in Q4.How does that translate into profitability? You have already seen in the highlights that we've delivered another strong quarter of profitability improvements, especially compared to previous years. And as a reminder again, Q1 and Q3 are typically the less profitable investment quarters, so this is quite remarkable that we've now achieved a plus 4% on a group level in Q3 this year after harvesting quarter -- expected higher profitability of 8% in Q2, which brings us to already at 3% for the full year. Both segments have been contributing broadly equal to profitability in the last 2 quarters and also to cash flow. So we're quite happy about the development both in Europe and in Brazil.And obviously, now looking at Q4, you saw that we did not extend the profitability range significantly upward just like the revenue range. This is primarily linked to the realization uncertainty we have with the current COVID-impacted replenishment and supply time.So in terms of cash flow, we can celebrate that we were cash flow positive for the first time on a last 12-month basis. It's probably -- it's obviously not our ambition to do that only in times where we have significant boost from COVID-induced supply, but I think it's even more remarkable that we reach this goal despite voluntarily repaying a EUR 6 million facility in Brazil that we could have kept. But we felt that our liquidity is on a very stable level over the last 12 months and also on a sufficient level for now so that we felt certain and safe to repay that facility and still have a very solid cash and liquidity basis for our coming investments in Q4 and in Q1.However, obviously, we continuously monitor all options to strengthen our cash position, being -- extending or introducing cheaper debt facilities throughout the next year as our profitability opens up that opportunity also with banks. But we don't rule out any other actions as well, so capital market options are available to us. We're looking at these, especially also in Brazil. And this is nothing where we are reporting any update today. But we continuously monitor all options.So taking a look forward. The last months will -- of 2020 will continue to be impacted by the first evolution of the COVID-19 pandemic actions, both in Europe and in Brazil, and also about the consumer sentiment now, also with the vaccine looking positive. So we've been quite cautious and preparing for that in terms of extra resources in our operations and customer service teams. And the significant degree of uncertainty, in particular, lies with delivery time, delivery reliability and managing the uncertainty across the global supply chains of our supply base.Our key priority remains the health and safety of our customers and employees and partners. So if in doubt, we will be protecting these rather than optimizing on top line or profit on any given month. But broadly, in general, we're still benefiting and we feel highly privileged that we've been trading through the phase of the pandemic so well.Q4 order intake, as mentioned, saw a higher momentum again than in Q3, with constant currency in October at 62%, a bit stronger in Europe than in Brazil. And also, the start into November was on such elevated levels, so I think this reflects a renewed boost of consumer demand with the second lockdown wave in Europe. It also confirms that going out of lockdown and going into summer in Brazil, the increased online penetration leads to sustained high demand. So we feel comfortable adding a bit of aggressiveness to ambition in customer acquisition. So after already stepping up marketing in Q3, year-over-year, we will do the same in Q4. And that's why considering all the above, the uncertainty around the supply chain but also the strong trading, we felt that we need to upgrade our guidance for the rest of the year. So we now guide to a range of 38% to 42% in top line and 2% to 4% in adjusted EBITDA.And as mentioned again, the main uncertainty at the moment that remains difficult to predict is the revenue realization of the very strong demand, which is then obviously also influencing profitability as costs are always booked into the period where they occur and revenues into the period where we deliver the goods to our end customers. So we've taken a very deliberate stand here to not be overly optimistic for Q4.With that, let's open up for questions and answers, and thank you very much for listening, everyone.
[Operator Instructions] We will take the first question from Graham Renwick from Berenberg.
I hope you're well. Just a couple of questions for me, please. Just firstly, on the guidance and Black Friday. I thought it was interesting that you upgraded just before Black Friday, which is a very important period for you. So how are you kind of thinking about demand around Black Friday weekend? Is it a case that perhaps your GOV growth now has been a lot stronger because people are starting to shop a lot sooner and, therefore, Black Friday weekend could be perhaps a bit lower than your expectation? Or do you still see a lot of upside risk over that period? And just generally, what capacity do you have for growth across Black Friday if it was indeed a lot stronger than you expected?And then just secondly, without drawing you in on guidance for next year, so how are you thinking and the planning for growth next year? Because as your momentum this year gets stronger, the comps are obviously getting stronger. I assume there is an element of pull-forward demand from consumers this year. And next year, you will see consumer spending starting to shift back towards holidays and leisure and things like that. So what will you be doing going into next year to ensure you can sort of derive growth off this strong base?
Thanks, Graham. Hope you're doing well as well. So on Black Friday -- or why did we upgrade last night? Because we had to. So the numbers we have realized already, combined with our expected delivery curves and the expected trading in the next weeks, not looking at an upside case for Black Friday, take us outside of especially the top line range. So we did the upgrade. And yes, Black Friday is always very important for us and is a significant swing factor. However, this will then rather be an additional upside if it's exceptionally well this year.As you mentioned, people had a lot more time to buy online this year because they've spent so much time at home. So we all just don't know how strong Black Friday will be this year. We're preparing for it to be strong, and we've installed sufficient capacity in the warehouse. The inventory levels are not where they should be and would be in an ideal year because of supply constraints. So the Black Friday is expected, and we're preparing for a strong demand season. However, it will primarily then also deliver in 2021. So in terms of IFRS, this will also be rather than influencing your second question.In -- on the second question, 2021 growth. So I mean we're very happy that there's a vaccine and we're getting back to normal, hopefully, some time next year. I think Q1 year-over-year baseline will still be quite favorable. So Q1 should still be quite strong, especially with Q4 order intake also translating into Q1 growth.And then I think you're right. Many people will enjoy to travel or spend time outside of their home. Nevertheless, I think the home will remain a much more important place for families as they learn to cherish it. And I think if we just look at home24 ourselves and many other companies I'm speaking to, the pandemic has changed the attitude towards how we want to work and how much time we want to spend in the office versus at home with remote working possibilities that are opening up.So I think there will be 2 -- there will be 3 effects on demand. One is even if the total market will decline, online will remain at a much higher online penetration that we can tap into. So the effect for online will be much, much less. Second, we haven't even tapped into the growth potential out there by increasing marketing spend this year. So year-to-date, it's still below last year, and we're just starting to ramp up.And obviously now, with having reached not only core profitability but also cash flow breakeven, that's the point where we will take our chances, and we believe that the addressable online market volume will also grow next year. And in a year where we then don't take marketing down or keep it flat but are in a position to reinvest any additional contribution margin we earn into growth and do that first rather profitably, we believe we can still deliver significant growth next year.The third dimension is that I think the online penetration will gradually even increase. We will see high streets and shopping centers have a domino effect where the insolvencies haven't even been materializing yet because of protection of the insolvencies in our core markets. So as those trickle through, we will see that shopping malls and high streets will even become less attractive. And therefore, traffic will go down, and that will lead to a continued -- further continued shift and second dimension shift from off-line to online.So overall, we're preparing cautiously for next year with a higher ambition level to expand our growth and take market share. We feel very well prepared with that also by having increased our active customer base significantly. And we know our repeat behavior has also improved gradually over the last years, and we expect that to continue to develop favorably next year also on a much higher installed base. So Q2, Q3 baseline, obviously, will be tricky to beat, possibly also Q4. But we feel that, especially if we step up our ambitions in customer acquisition, the market is there, and we are well prepared to do so.And lastly, as hinted at our installed capacity in terms of supply chain with the warehouses and the ERP, are in a position to digest double what we see as the current run rate without any sizable CapEx. So we can digest more than EUR 1 billion of revenue through those installed capacity. So there's no constraints apart from finally being able to execute our growth strategy without any distraction from the post-IPO hiccup topics we had to fix first.
That's very clear. And then just a follow-on to that. I think earlier in the call, you said that you wouldn't compromise of EBITDA breakeven going forward. So when we think about sort of the reinvestment over the next few years, would you be happy to go back down to sort of an EBITDA breakeven level? Or would you want to maintain the business at a free cash flow positive level, which I assume is probably more fair, 3% or 4% EBITDA margin?
Well, I think on a yearly level, not considering Q1, Q3 investment quarters where profitable will be lower, Q2, Q4 will be higher, without having done anything on liquidity, we will broadly manage it on cash breakeven. So what you're saying is right. We will rather shoot for 3%, 4%. I think the good news is that any additional contribution margin above that can be reinvested again.So it's not from today's baseline at 3%, 4%. So -- but yes, broadly speaking, if in a base case, we deliver 3%, 4% margin with a 20% top line growth, we could deliver any incremental euro above that with a PC3 of 0 just to increase top line and take market share. So I think that's conceptually how we're thinking about it. And yes, we highlight especially that we don't want to jeopardize the breakeven because it's so important looking at our liquidity, which is not on very comfortable levels yet where we could say, yes, we could also fall back into cash consumption for a few quarters.
We'll now take the next question from Adam Cochrane from Citi.
A couple of questions from myself. You talked about the reinvestment both in marketing in fourth quarter and beyond. A number of the e-commerce companies now are talking about reinvestment. Does that mean that some of the beneficial marketing costs and dynamics that we've seen during this year will likely reverse quite rapidly, and therefore, we're going back to the sort of prior conditions where the cost of marketing and customer acquisition might start to increase given how much people are desperate to try and get new customers to effectively come -- overcome the large comp of sales that you're seeing this year?And then secondly, when you think about the risks for delivery being one of the main drivers between the 2% and the 4% EBITDA margin, is that a matter of whether there is sufficient delivery capacity in the networks for your products to actually be delivered? Are you seeing anything on freight costs? We're hearing about various potential surcharges and things. How does the outlook for the freight and the logistics side impact your outlook?
Yes. Thank you for that. So on marketing, we all don't know. It's a crystal ball. But one thing is for sure, and we shared that on Page 7, is that Q2 was extraordinary, right? So the cost per visitor basically in this year is -- was inflated in Q2 as off-line businesses shut down, didn't spend marketing, and then there was an extra demand as people returned to their home.So we don't expect this to continue. And therefore, I've already mentioned that on that page that we rather see the Q4 '19 levels, which is close to Q3 '20, as more sustainable ratios. And the ratios also depend obviously on the aggressiveness of the increase in spend as GOV translates into revenue with a time delay, but also a new click or new acquired visitor through the website translates into revenue with a time delay.So I think it's fair to assume that marketing will become a bit more competitive compared to Q2 and also partly Q3. However, home and living has been booming in general since June already, and we have seen the ad density already increase during the shutdown. So there was a short period of 2, 3 weeks with decreased competition, but then already, at the end of the first lockdown, the ad density rather increased. So many of the businesses that didn't turn to online marketing before started for the first time ever spending marketing there because everything else was shut.So I think especially for home and living, this will not be such a drastic effect versus industries where there was just no spend this year and there will be spend again next year, like travel or leisure, where it was basically off a cliff and will increase again. We all don't have a crystal ball. But I expect that our first sort of profitable customer acquisition will put us in a position to outbid competition no matter where the price will go, yes? And because in the end, everyone needs to earn money at least eventually. And with our higher profit contribution margin profile and the fact that we can acquire customer cohorts profitably, we will be able to continue to outgrow competition.But yes, again, I think it is fair to assume that marketing ratios will not decline further or we will not see a 10.5% again in Q2 next year because we've always said in our terminal margin, we believe marketing ratios -- also when we've come down to a much less dynamic growth rates in the range of 10% to 12%.Second question on the delivery realization. It is primarily linked to supply. So at the moment, we have not seen any massive capacity constraints in last-mile delivery, partly in COVID restricted regions. But broadly, the uncertainty in revenue realization and getting the goods to customers is rather on, firstly, getting the goods to our warehouses and then out again.So it's correct that it's quite counterintuitive. But especially from Asia with global trade being down year-over-year, the capacities of the ships have been such that we're now paying surcharges again to actually get on the fastest boats. We're doing that, and we can afford it also margin-wise. But the main constraints are both from Asia, but especially also in Europe, getting the goods in. And that is primarily linked to raw materials. So foam, woods, the pandemic has led to trickle down delay effect of the whole value chain, from raw materials through to manufacturing, down now to also deliveries into our warehouses.
So you're not worried about your carriers for the last mile [ deal ] surcharges given excess demand and having to absorb then the costs.
We have long-term contracts with our carriers, multiyear contracts. And we have experienced situations where surcharges were posted 2 years ago, for example, and we always strive to have constructive, long-term relationships with our carriers. So I don't rule out there will be partial or geographical delays in the last week of this year, especially on the parcel side with e-commerce booming possibly more than in other periods. But this will not be a material effect that will take us out of our range, or I would even say, as mentioned when we spoke about outlook, we did consider this uncertainty by raising our profit margin guidance less than our growth guidance.
Okay. And just one final one. These new customers that you've acquired, can you just remind me what the -- how long will it be before -- obviously, you've got a lower order frequency maybe than the fashion retailer or others. How long will it be before you can tell the churn rate of the new customers that you've won in the last couple of quarters and whether they will be following the same behavior as customers from previous cohorts, please?
Usually, that -- we can tell that in the first few months because if you think about it also, many customers in home and living are on a project or on a life trigger and move house, and then you buy the first item and you're not finished with the project. So we do see follow-on purchases. And those then also translate into the quality of the cohorts afterwards.So we are confident that we have acquired high-quality cohorts. But again, back to Graham's question, we all don't know how consumer behavior, also of very solid cohorts, will develop once we're all allowed to travel again and spend time outdoors. Therefore, we believe it's a great potential springboard for future growth, but only the future will tell how solid it will be.
We'll now take the next question from Lukas Spang from Junolyst.
Yes. Just a follow-up question on the outlook. You already talked about -- several times now about the uncertainty for Q4 in terms of delivery. But taking this into account because you probably had to handle this topic out to the rest of the year and Q4 is also a harvesting quarter, so is there any reason that Q4 could be not that good, for example, like Q2 this quarter, in your opinion?
Yes, very easily. In Q2, our warehouse in proportion to the top line was much more filled. We've now been into COVID-induced demand for 6, 7 months. Every goods that come into our warehouse are immediately going out to customers again. And the delivery time, so the time from order intake to revenue realization, is much longer at the moment than it was at the end of Q2, and we don't expect that to normalize again until after Q1 next year.Because also China is going into Chinese New Year holiday beginning of February, so any orders we placed already for the last months won't arrive before April. So Asia is roughly 1/3 of what we sell but also Europe where, typically, replenishment times are 3 to 7 weeks. They basically are at least 4 weeks higher at the moment because the entire industry is seeing longer replenishment times.Maybe to highlight that again. So that's why we especially spoke on Page 7 about the non-marketing-related ratios. They're very reliable and very strong. The big question is the -- when do the customers convert -- that we acquired [ first sort of ] profitably also in Q4, when do they convert into IFRS revenue? Because the marketing spend is booked in the month where we get the invoice from our partners, but the revenue will only be booked when the orders are delivered out to the end customers.
Yes. Sure. Okay. And then can you give us, please, some more details on how much of the Q3 revenue was order overhang from Q2? And how much from the order intake in Q3 is not yet booked as revenue in Q3?
Looking at Pages 9 and 10 should give you quite a good idea. That's always communicating time period. So we can't give you the exact number, but the order intake in Q2 was 71% and the IFRS revenue in Q2 was 49%. So IFRS was much lower than GOV intake. In Q3 now, order intake was 45% and IFRS revenue was 54%. So IFRS was higher than GOV.And with the information we also gave on revenue realization on Page 10, that there's no overhang anymore in Europe. So the European GOV to IFRS ratio is back to a normalized level, but they're still being an overhang in Brazil, which in euro terms, at the moment, is broadly 20% of the group; in constant currency, 25%. So for 20% of the euro-based, 25% of constant currency-based revenues, there is still an overhang from Q3 that we expect to materialize in Q4.If delivery times would go back to normal delivery times for Brazil as well, and I hinted at that as well on Page 10, we don't expect for Q4 that there is an acceleration again versus what we've seen just a month ago. So both Europe and Brazil are expected to see slower revenue realizations than in previous year and also partly than in previous quarters. And that's the reason why we've been more cautious on bottom line than on top line.
Okay. And last but not least, if I got your -- if I got -- understood you right, you also take a look for capital market options in Brazil. So do you give more detail now also with the positive sale of the Brazilian business?
No. So we're -- taking all options into consideration and looking at the development of the business, we don't have any interest to just sell it. But if there is options both in Europe or in Brazil to complement our liquidity position by bringing in the right liquidity from facilities or a minority investment or other options on capital markets, we might do so at the right time.
Okay. So the minority topic would be the most relevant or could be the most relevant.
It could be. Capital market options also could be just as relevant.
[Operator Instructions] As there are no further questions in the queue, I will hand the call back over to your host for any additional or closing remarks.
Well, thank you very much. A very short call this morning, and looking forward to taking this journey further with all of you and updating you on how the further development of especially the demand versus marketing invest side would play out.We are very well paced to tap into the future demands of home and living. We've got a fully invested base, and we expect that the gradual shift from off-line to online will help us also see accelerated growth in the coming years. So looking forward to take that journey together with all of you. Thank you very much.
Thank you. That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.