Release Date: March 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Allegro.EU SA (ALEGF, Financial) achieved a significant milestone by crossing the PLN60 billion GMV threshold, closing the year with PLN64 billion GMV.
- The company reported a 17.9% increase in adjusted EBITDA, reaching approximately PLN3 billion.
- Advertising growth accelerated by 31.3% year-on-year, indicating strong potential for future revenue streams.
- Allegro Pay demonstrated robust growth with a 41% increase in loan origination over the past two years.
- The company successfully expanded its logistics capabilities, reducing unit delivery costs and improving efficiency.
Negative Points
- The GMV growth for the quarter was slightly below expectations, missing the lower end of the guidance.
- The adjusted EBITDA margin for the quarter was lower at 5.61%, partly due to increased marketing investments.
- International expansion has been paused to focus on improving existing operations, potentially delaying growth in new markets.
- The company faces competitive pressure from new entrants like TEMU, impacting marketing spend and market share.
- There is uncertainty regarding the appointment of a new CEO, which could affect the company's strategic direction.
Q & A Highlights
Q: What drives your comfort in increasing the long-term target for the Polish EBITDA margin, and how does competition factor into that guidance?
A: Jonathan Eastick, CFO, explained that the company managed to run 2024 at a higher margin than previously anticipated, achieving 5.9% instead of the expected 5.3% to 5.7%. This was due to progress in advertising, fintech, and delivery, which allows for higher margins at a given growth level. The increased CapEx investment is expected to translate into better delivery costs, contributing to this confidence.
Q: Can you provide more details on the long-term guidance for international operations and the expected trajectory towards breakeven?
A: Jonathan Eastick, CFO, stated that the international segment is expected to gradually improve towards breakeven by 2028. The Mall segment's cash flow consumption should end by 2026, and the international marketplaces will see margins improve gradually from the current negative 20% over the next four years.
Q: How effective were your marketing campaigns in Q4, and what impact did they have on your results?
A: Jonathan Eastick, CFO, noted that the marketing spend in Q4 was both defensive and offensive, aimed at gaining mind share against competitors like TEMU. While the campaigns were effective, the retail environment was weak, and the company came in marginally below guidance.
Q: What is the status of the CEO search process, and should we expect any changes in the company's direction once a new CEO is appointed?
A: Roy Perticucci, CEO, mentioned that the search process is well underway, led by the Chairman and the renumco head. The goal is to have a new CEO nominated before the AGM, ensuring a smooth transition. There is high confidence in achieving this timeline, and no significant changes in company direction are expected.
Q: How do you plan to manage logistics costs in the medium to long term, especially with the upcoming renegotiation of the InPost contract?
A: Roy Perticucci, CEO, explained that the company is not interested in volume-based deals and prefers to direct volume to the best-performing partners. The focus is on optimizing logistics costs by leveraging both internal capabilities and external partners, ensuring the best combination of speed, reliability, and cost.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
