Q2 2020 Trivago NV Earnings Call
Okay.
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[music].
Good day ladies.
Thank you for Sunday Bye.
That's true level Q2 earnings call 2020, I decide what that busy but I think that leasing will be most.
I've a question you will need to Brent thought on one like a telephone I must advise you disclosed it's been Dakota today Wednesday 79 of July 2020, yet piece to be join the call today by access so cheap I was evil I imagine detector.
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The following discussion including disciplines your questions, Jeff management's view of todays once they too light.
Since when do you.
She loves does not undertake any obligation to update or revise this information Oh with some of the statement main on what they call are forward looking.
At least preceded by words, such as the aspect, we believe we anticipate or seemed that statement.
Easter effect to the Q2 2020 operating on financial review on the company or their filing with the FTC 40 information about factors, which grew close to levels actual just shows to differ materially from these forward looking statements.
You will find consternation on non-GAAP measures are the most comparable GAAP measures discussed today into regardless operating and financial review, which is posted on the Companys IR website at <unk> dot to travel to calm.
Joining quotas to put it at least based achieve Atlas investor relations sites for enforce incomes and finally on this other western states.
Hi, some on these calls will be against just shows for the comparable periods of 2019 with that let me turn because others to access.
Good morning, Thank you for joining us today.
Only two months of cost since our last earnings call and it feels like a long time ago.
Since then.
We have seen some return of travel activity globally, but more importantly, coping 19 has been a catalyst to accelerate our strategic repositioning and the changing industry and despite the difficult situation. Our teams have moved mountain.
Starting in May we have seen a return of travel first in Germany.
The U.S. and New Zealand later in another market [laughter] almost everywhere leisure nature destinations happy in the first to pick up predominantly in driving distance and with an increasing demand for alternative accommodation exceeding 20% of our referrals for the first time.
Germany as one of the most stable markets right now has seen leisure nature of the mom to pick up approximately.
Up to 100% of last year's volumes, what city trips and international travel or around 50% of last year's audience.
But recovery, it's not a long way straight.
And the U.S., we've seen how close they travel demand to striking to help situation and starting mid of two under recovery and year over year growth rates in the U.S. has a reverse it.
During this difficult time, our teams have done a remarkable work.
Hi Tech teams have significantly increase their innovation pace not only improving the call product, but also launching the first better version of our new local travelers feature.
The marketing teams [noise].
Fully ramped down or a marketing activities and then I'll ramping up in line with a market with tailored messaging and campaigns for the current situation.
Our assays in marketplace teams have worked as true partners with our advertisers supporting them when the crisis hit them and jointly working on significant recovery initiatives, most notably the sponsor listings on display advertisement products have been commercially launched and various end to end conversion optimization tests are in the works.
Despite the operation on the strategic progress that we've been making we're not unaffected by the crisis that has hit the industry, but here's what kind of all financial development in more detail.
Yeah. Thank you all the and good morning, everyone.
Let me start with it saying that Q2 has been a very special quarter.
Even the low revenue base or just 60 million euro sum up already shows and K.P.I. I noticed meaningful assuming normal quotas.
Net loss in the second quarter was 20.2 million euro. Despite the loss, we were able to strengthen our cash balance without taking up external funding.
This is largely due to the effect, but we were able to collect a significant amount of outstanding receivables, but also because we record faster the changing environment by focusing on preserving all cash.
Oh, sorry, and finance teams have done an amazing job here and that's the resolves all over or test cash position increased by 19.8 million euro to over 230 million Euro at the end of the second quarter. This will give us the financial flexibility to meet future changes.
In order to keep that flexibility, we changed our structure and the second quarter.
Oh, it's our team has done an outstanding job dealing with many changes in a very short time period.
I'm in particular happy that we have found a new home for our around 60 employees in Panama.
Adjusting for those restructuring costs of 5 million Euro reduce operating expenses by 10.2 million Euro in the second quarter compared to the same period and 2019.
Moving onto trends in July we see a high correlation between demand for local let her trips where they have situation in the respective region.
And the demand in various markets continues to be monetized and remains largely unpredictable.
In July the recovery has been strongest in developed Europe, Sofa, SBC coal markets, like Germany, and Italy recovering faster and most other markets experiencing a gradual improvement in traffic volumes.
Most specifically as of July 24 months to date, our qualified reefers decreased year over year less than 50% in developed euro.
And were down around 50% in rest of world.
In Americas or qualified preferreds, but down around 70% year over year months to date.
The pickup in demand flatten out in the U.S. and the second half of June and we have not seen a recovery in Latin America yet.
Overall, our advertisers remain cautious so bidding levels are still down significantly compared to 29 team our revenue per qualified refer which reflects the current bidding levels as down more than 50% globally year over year month to date as of July 24.
Nonetheless, we expect revenue in July to exceed or revenue that we recorded for the whole second quarter.
With that let's open the line for questions. Operator, we're now ready to take the first question.
Thank you My first question is coming from the line.
From that.
Hey, good things open.
Great. Thanks for taking my question and thanks for the the color around what's happening in July so whats happened so for Angela.
You could give a bit more color just on.
The kind of the early iterations of the local travel product.
What's kind of the vision there how quickly.
Can you.
Kind of roll that out.
And and evolve it.
And then also just maybe an update on the cost per acquisition offering any early stats you can give us on.
Advertiser interest uptake that sort of thing thanks.
Thanks, So on the.
Local travel product ever said it is in a better testing phase right now, which means that we have a first usable product life that we do test with a small subset of users.
That isn't very important milestone and I'm very very happy with how quickly the team managed to get to that point.
Realistically it needs a few iterations because the before the product is ready for further rollout, but in the third quarter, we expect to make significant progress.
On CP I, Oh, we do have and that SCPA.
Net SCPA product currently live with the first advertisers.
And we're working on rolling that that out further and there is significant interest from many many advertisers to add to move fully or partially to that product.
And I would expect the rolled out to it to see significant interest and traction again and the next couple of months.
Okay, and just a quick follow up on superior how does that.
Handle handle cancellations I mean does that somehow factored in for something that you guys can monitor or is it.
Basically the acquisition just to find is the kind of the initial book room night, not necessarily a state room night.
There there are different different models, yeah, we we do offer a cross SCPA. So that is that basically it for every booking and does not factor in cancellations and we also do offer and that's EPA where.
There is a credit for a compilation instead are coming in.
Great. Thank you.
Next question.
Brian.
Please go ahead.
Thanks, guys a couple of question.
Thanks for some the referral Dan or on what you're seeing in Germany, I think booking dot com as mentioned generally when you see customers travel closer to home.
You see them, having shorter durations of state stain and less expensive accommodations versus when they travel.
Farther we wanted to we wanted to hypothesize and ask being that you are you seeing some of those trends this year and.
And maybe they're replacing a local travels replacing some of the bigger international travel are you seeing customers consumers trading up versus what they would normally spend in local vacations in terms of duration property class anything you could tell us about the propensity to spend in local.
Thanks.
[laughter], it's a bit difficult to generalize, but if we just take Germany as a market the duration of the traps has actually gone slightly up.
And so so we don't see that the duration has come down there is obviously makes effect in there because currently there's a lot more leisure nature travel versus city trips that tend to be a bit shorter.
But if you look at the overall data the trips are getting a bit longer in terms of a price levels. Overall, there again, there is a different trend the city prices tend to have dropped this year compared to last year, which is clear because there's a lot less demand, whereas the the beach.
Particularly about but all the nature destinations tend to hold up or even go up slightly but the development as different ready market by market, but yeah, just just taking Germany as the market. That's currently has recovered most globally for us those are the trends that were up seven there.
And then maybe we had one quick follow up that that's related and it's just a broader question revenues are down I'm clear, how long unclear of what the than linear path or how linear that passes to recovery or are there any opportunities or any other problems in the travel market that that are being an earth right now.
Hi Cove is that that you could address maybe longer term rentals for.
Remote or potential nomadic workforces, we've been hearing about locations open up for monthly rentals, where people want to travel and and work from a remote location.
Thanks.
[noise] I mean, there there for sure many opportunities that that that we're looking at than that are opening up right now or that we expect to open up and a month and even even years to come.
Domestic local travel is clearly a part of the overall travel universe that is benefiting as our apartments and as you rightly say one of the drivers of that is to use apartments are longer time rentals as an alternative to working from home.
So yes, we do see those opportunities and we as an institution are very focused on those opportunities.
The challenges are clear and the opportunities well outweigh the challenge us and and Demetra I'm from our perspective.
Thank you Act.
Next question.
<unk>.
Huh.
Okay.
Yeah. Thanks, a lot or just a question on along on the local leisure opportunity I'm curious to know everything that is enough lodging supply that's even available to meet the demand that you're seeing there and just in terms of your your offering or how do you plan to promote that.
Or the end consumer Oh are you also trying to bring in more advertisers from new Energizer and go to fall.
And then adequate off.
So if brooks' question is is there enough local supply that depends obviously by market you have some countries in Europe that.
Have a net exports of tourists the UK, Germany et cetera, and what you see in Germany. For example that there is also international traveling but that's still the majority is all the vast majority isn't driving distance or Netherlands is very popular Austria is very popular Poland is getting more popular cratia. So all this sensors that are all although.
So nations and driving distance all that that you could buy driving a bit further can reach and even more importantly, if something would happen you could drive back which seems to be very important than the overall a consideration.
So the.
But for in terms of advertisers.
The we have a very very broad coverage and we think actually that we have the broadest coverage of all platforms I'm by having all major provide us off apartments and hotels on our platform. So right now that is from a value customer value proposition a clear benefit of having failed something available when other platforms.
I would have run out already.
So we don't think that that we need to catch up in that direction about that were on the contrary ahead of our competitors and Thats breakout.
Understood and then maybe a quick clarification on the on the state as it stands.
You've gotten in Germany can you quantify what the impact was for the second quarter and how should we think about that continuing for that ended on that yet.
Yeah, So we use that scheme in.
April and parts of.
So for some teams in May and then as of June everybody goes back but.
In April we used to for less than 30% of our employees overall and most of those people still works, 50%. So there's just gives you a rough idea I mean, we didnt called the exact number.
But the impact was not a very significant.
Got it thank you.
Thanks, Tim is coming from.
That's correct.
Hi, guys its Ryan on for Schrom.
So first in a letter I, you mentioned that the full roll out of sponsored listings and display ads coming in second half I'm, sorry could you talk more about that roll out and that's the low activity on the platform meet that roll out any any easier and went to school.
And then secondly, I know so early but what are your thoughts on the travel environment during the holiday season.
As of right now thanks.
[noise] on on this on the display on one of the listing product we have technically qualified the product already last quarter and on our commercially rolling it out which means that we have quite a few advertisers life already on the product and have a very strong pipeline.
End of advertisers that want to launch the product into campaign. So there's a lot of interest and the product.
The what is holding it back there is obviously some limitation and onboarding new campaigns on your advertising because there are some.
Some technical implementation required on both sides. So that is one which is just working away and and we are we're working on that the second one is that there are still advertisers that don't have that for marketing teams back and still have a significant part of that team and furlough programs.
And that that is also a limitation aware because there sometimes just not not all the right partner has a available and and the pace at the partners available to really move this forward, but we're very happy with the pipeline that we're having right now and expect a significant increase and participation right and a third.
Gotcha.
On on this on your second question so trends we are seeing.
What is what is happening or how it would be some summer troubling I'm playing out.
I mean, we saw an uptick in demand since beginning of May in particular in the U.S. and in Europe.
And why the uptick in demand since may in the U.S. has plateaued in the second half of June the positive trends largely continues in Europe in January we believe that travelers coming back in three faces first let's ratification trips to local destinations when city trips and lastly international trips and it's a general theme.
You're seeing right now across most countries.
Let me put one slide in the Investor presentation, where we gave Germany as an example, and they have a year over year recovery rate of locally is our troops increased 75 percentage points in the first two weeks of July.
Compared to the first two weeks in April while the recovery rate for city trips for the same period increased only 58 percentage points and for international trips or 45 percentage points.
Overall, there's still a lot of uncertainty, though with governments changing restrictions based on your infection rates and given the uncertainty many trevor though travelers opt for local destinations.
Which they can reach by car for example, so what X. I mentioned before.
Hence received a shift to local Trevor.
And then the other trends clearly and we have discussed it as well before but we see is to be continued shift towards apartment, which from our point of view, it's great to see as we started to invest into that segment couple of years ago and the work off over the last few years is paying off right now.
Great. Thanks, guys.
Thank you.
Tim.
James.
Seeking.
Great. Thanks for taking my questions and I appreciate the color on the recovery than what you've seen Europe and U.S. So far on in terms of qualify referral can you talk about maybe to auction density and what a bit here in terms of revenue per qualify referral here at trends into July.
You sort of mentioned that advertisers that a little bit cautious at this point in time, just want to see how that trends comparing versus what you're saying okay. Thanks.
Sure. Thanks, Jim So, yes, the marketplace remains monetized and levers can vary significantly by market.
So it is difficult to make a general statement, but what I can say is that as of July 24th revenue per qualified Refurbs, which is a good proxy for bidding levers is still down more than 50% globally year over year months today.
So we do see some recovery if you compare that to the Q2 number but it is lower than for example, the recover recovery in qualified referrals.
But as more and more advertisers are coming back we expect bidding levers to normalize but again, it's it's hard to make an exact prediction here and we will see how that will shake out in the remainder of the quarter.
Okay, great. If I can ask a follow up question regarding alternative accommodation here.
Obviously, you talked about skewing towards local travel and also you know Teradata accommodations here do you feel you have enough supply. Currently you know if you do why are you doing specifically to optimize it sort of resulting conversions here. Thanks.
We do think that we have a sufficient supply as a and I've said before we do have the from our perspective brought US offering overall was the with the highest number off hotel and and department providers on the platform what we're doing.
To optimize there there are quite a few test they were running on the product side to optimize the flow further for apartments as the platform has historically been built foretell sand.
We only thought it a bit more than two and half years ago to lead integrate apartments. So I would say it it's fair to say that we are we're not done there they're up like one specific example that we've we've launched a new guest cellectar product that basically allows you.
In a more intuitive way to search for larger groups.
Which before was that was not as optimal as it is right now, but there there are many other test that we are running to integrate apartments better and also the specific searches that are more skewed towards apartments like larger groups family vacations or vacation homes et cetera into the core product.
Hey, good if I can squeeze in one more question are we going alternative accommodation here did you talk about Germany is the first country that you're seeing recovery can you give a sense a percentage of room nights, you're seeing for alternative accommodation Germany.
We I mean, we shared that we.
As globally, our share off of the reports was exceeded 20% into second quarter I.
I mean, we don't disclose that number on a on a market level and yeah. That's all we can say.
Okay, great. Thanks, so much.
Your next question please.
Please.
Uh huh.
Hi, you get a Chris on for Lloyd maybe if you on you guys is on marketing spend can you just talk a little bit about the adoption of the C or SCPA product and how that will potentially impact you guys marketing spend I know you guys made the distinction between having a net gross SCPA product and then looking out to Threeq you.
How should we be thinking about a year. It's also mentioned that TV ads are starting back up how could TV ads really be driving sequential spend growth for you guys versus spending around performance dollars and just thinking about those TV ads that you guys have been experiment thing that so far just any color that you can provide on the kt eyes versus half TV ads.
Kate you guys have look or run out of grieco bid environment. Thanks.
Sure on on the net and cross EPA models that we are offering.
We have started with some launch partner that's right now and are working on rolling the product out further.
There has had very significant interest and in particular on the net SCPA. There is a lot of concern from it and particularly smaller advertisers that they cannot predict well cancellation rates and they do see value and us actually aggregating the data from multiple advertisers and predicting the cancellation rates on.
They are behalf and that is that's the at the value creation opportunity on top of office, they and taking our bidding algorithm.
Which is again aggregating obviously all the data that we have access to versus just the individual advertisers data. So those are the two leavers to improve.
Auction dynamics, and we would expect that the rollout of these tools will help the auction dynamics and and supports the the overall recovery of the auction that Mathias mentioned earlier.
And then on on your second question. So first of all let me say that as you can see from from the numbers. We just closed that in the second quarter, we put on marketing activities largely on hold.
Beginning of June we have reengage in some performance marketing activities and have launched first TV campaigns in some of our core markets. In July we have then increased or brand marketing spend and started to launch our new campaign.
And depending on the first reside and it's a bit too early at this point enter general tremor demand, we will adjust our spend for the remainder of the third quarter.
However, given the unstable has situation we remain cautious as we said in our shareholder letter over all in all marketing activities.
And we believe this flexibility is key and our TV partners have predominantly supported US here. So all fixed commitments for for TV advertisement for 2020 have been mostly reduce or push to 2021.
So to your to a question on how we approach TV and what Kb ice we look at I think that it's not really different. The one thing that is different is that we tried to be more flexible and Rick to more what what we see.
Does that answer your question.
Yeah. Thanks.
Thanks.
Kenny.
Okay.
Hi, Thank you I had a couple of questions on a pricing dynamics in the market now accommodation.
Have you seen any change in the variability of pricing for an accommodation from one okay because it backs.
Or from the LTAC versus supplier direct sites.
Thanks, Kevin I wouldn't be in a position to call anything out I mean, there, obviously, there's more volatility than usual and.
In particular fall marketplace.
What we've seen in the second quarter that summit advertisers, even do you even deactivated their campaigns so they dropped off of our marketplace.
Now they are coming gradually back so overall day, there's a lot of volatility and then or the that shift and changes we called out obviously adds to the noise there.
But there's not one theme that I would call out or that I could could mention here.
Yeah and then.
And then when you look at ER at 80 hours coming down you have a sense of how much how much of that 80 or 80 Arctic lines or from your side from the suppliers are from mix shifts in terms of where the travelers are growing versus the suppliers actually cutting that the prices there accommodation.
Yes, so I'm looking at that and again, there if we need to look at individual markets, So and the German market. The prices have not really come down for leisure nature destinations because there is there's a lot of supply demand.
Where's the prices have come down and city destinations. So there is the average is heavily influenced by that makes clearly, but it's not you cannot say that overall prices have fallen it depends very much which segment and which destination.
And we see similar things and other markets, but obviously that makes us very different market by market.
Yeah right and.
So no sorry, just to add to that I mean, you know 80 ours.
Our part of our revenue per qualified refer and.
If you.
If you take my previous comments I mean, the biggest driver there is clearly the bidding levels. We're currently seeing all marketplace. So for us.
The volatility there plays a much bigger role then then changes in 80 OS.
Yep.
And then and then just a follow up on that the market by market data can you talk more about or can you give an incentive how how strong the recovery in Germany, and Italy has been what kind of levels you're out there relative to where you work.
Yep.
[laughter], it's we don't give specific numbers for individual countries. You know we report in segments and I gave you a more color what we see in July in terms of qualified referrals and developed Europe.
But having said that I mean, Germany is a a very strong market and so for the recovery has been has been stronger than other markets and I think a good starting point for you is to look at a general market data you can find and what we see on all platforms shouldn't deviate too much from that.
Got it and then I didn't want one other one there.
So America month to date Q ours are down 70%.
Can you talk about what that looks like compared to previous months that.
You know how what kind of levels are you out in June there for Americans.
Yeah.
So I mean, if you look at a qualified referrals in the second quarter.
We reported that number and you can imagine that in April that number was down much more and then in May we have seen some recovery, but there was very slow. So if you if you look at the absolute.
Number of quantified referred to in Q2. The majority the vast majority of that was in June and so I think if you take that as a starting point and compare that and that gives you a quite a good idea off where we were in June and then you can compare that to the 70% I called out.
Great. That's helpful. And then if I could just that one last question a follow up on your previous questions. So I was wondering on TV advertising costs, when you're going out and buying.
Or making new placements.
Can you talk about how much pricing, it's come down on TV to reach.
Same number of people or Howard is that you look at it.
You're going on buying a buying TV spot.
Yes. Thanks. So the question I I have to say that has been something that development that was very positive we've seen a mutually collaborative approach from almost all of our TV partners I'm trying to help us out in a difficult situation and and really.
Valuing the relationship that we've built up over the last couple of here so.
We experienced a full range of getting even free advertisement and the time of the locked down from certain partners to getting getting discounts on the relaunch.
But on the exact exact discount levels I cannot comment, but generally speaking we've been very very happy I'm often.
I had to support that we have been given by our our partners.
Great. Thank tax so thanks, yes.
Thanks, Kevin.
Yes.
Hey, this is a Alex Wong on for Brian a couple of questions from US one just maybe bigger picture following up on the advertising questions. Given you guys happy opportunity now to maybe a rebuild the advertising spend from.
A lower base given the travel environment have you sort of given any thought around a longer term bigger picture any fundamental shifts in sort of the travel our marketing mix and how you guys you're approaching a short answer that that marketing expense going forward second one around sort of your advertiser mix obviously helpful.
The chart.
Are you, providing a slide but any color you can provide on obviously the change in mix you saw this quarter, how how that progressing sort of your expectations going forward, then I'd add one more follow up.
Sure, let me start with the with the Advertiser.
Having mix question I.
I mean as you know in general we do not comment on the channel mix, but what I would say is that for TV advertisement to be successful the way we run it you need a certain certain threshold in terms of travel interest. So in the early phase you most likely won't see us a as much on TV in most markets.
Whereas selectively investing into performance marketing centers China's might make sense.
In June we have done just that we reengage and performance marketing, but did not advertised meaningfully on TV now with a positive trend continuing in July, especially in Europe, we increased our TV investment again.
And as for performance marketing channels. Our strategy has not changed we mentioned the large scale performance marketing test that we started pre cobot 19, and they showed but generally orbitz were too high.
Right no bidding levels, obviously, much law and we continue to opportunistically invest into.
Those channels.
Making a statement on how this will look like next year I think that it's too early.
And then on the second question, yes on the on the Advertiser makes I think in in general the dynamic has been the following I mean in March and beginning of April we've seen pretty much all that for ties us significantly reducing their bets, where the lockdowns coming in and.
The wave of cancellations hitting them and some advertisers I'm, even completely de activating their campaigns going completely off line.
The same thing that I think is worth looking at is that that booking holding and they're a sub brands have kept all of their campaigns life throughout the quarter.
And have been actually one of the first to adjust the beds upwards. When they felt that cancellations rights were under more control and volumes were picking up and that as for sure help them to increase the overall share that we've reported and we now see more and more advertisers coming back online and.
King in a bit more getting more comfortable with the protection of the cancellation rates.
As I said earlier, the we think that their CP and the net SCPA bidding models will also supports advertising getting more comfortable and we are expecting the structure to normalize over time and we've seen some trends in that direction already.
That's helpful. Just one last question you know it sounds like you know Europe is seeing a pretty steady recovery, but giving you know some of the.
Recent sort announcement I think back by the UK to re impose a a quarantining on on Spain, and potentially other markets as well just curious to get your view sort of on you know is it sort of a more regional sort of improvement you're seeing or more broad based and their potential for maybe some flattening out like you saw in the U.S. and not in late June.
Europe.
I mean, there's always the rest of of a deterioration of they help situation that well then also lead in other regions to it to a drop in travel demand, but as of today, we we see and most of the markets a significant improvement in the situation in the UK specifically.
We've seen clearly a drop in demand for a Spanish destinations as you would expect after the government announcement, but not a drop overall, but more a shift towards domestic destinations.
And and I think that's that's always the weight almost in a way to think about it as long as there are safe travel destinations that you can't travel to safely. The we expect the demand to continue to two to increase and to recover but if the general health situation domestically and in the destinations as a teary eyed.
Being similar to what we've seen in parts of Americas than we expect the award travel demand to drop again.
Great. Thanks, so much cycle.
Thanks.
Yes.
The P. Morgan.
Hi, This is very on for Doug. Thanks for taking the questions first of all for OXXO I'm just a follow up on your local trouble color I'm just curious to hear how this product has performed versus your core search product.
Marketplace or advertiser participation is different.
Mr Course, first product and then ill follow up for Mophie is could you talk about how your cost let's talk about how you feel about your cost base right. Now what is your car current cost run rate and there's if you plan on bringing to bring this down further or are you comfortable at current levels.
So let me start with the was the local travel product or the opportunity that we do see and local travel is.
To be a bit more inspirational anywhere to travel because they are that the challenge that you're facing is that the top destinations that you have in mind might not be within driving distance all there might be a few that there will be very very crowded and so it is important for you as a traveled to get some inspiration one.
We'll be alternatives that might be a bit less well known.
But also very attractive and close by and that is the main difference that the the product is starting a bit earlier in the funnel. The commercialization is identical but but it is a bit more inspirational, whereas our core product requires you to know already where you want to travel.
That is not necessary in our local travel product the way. It is currently designed.
Yeah and on your cost run rate question. They let me let me start was saying we have made significant progress implementing the restructuring that we announced earlier this year.
By now we have closed all lots, which offers we have signed an agreement for the sale of our Spanish development Center.
And we are in the process of closing or answer them offers so we will be a much more focused organization, having consolidated all of our business operations to know headquartered in dusseldorf.
So overall, we reduced operating expenses adjusted for share based compensation and restructuring cost by.
9.4 million euros in the second quarter compared to the same period in 2019.
So you wouldn't need to adjust that for the reduction in other selling and marketing, which is mostly coming from lower TV production costs that we do not consider to be permanent.
And this gives you if you do that this gives you a good idea about our cost structure at year end.
Going forward.
In Q3 that number will be a bit higher as we don't get all the benefits from the restructuring that we expect to have.
Have then it at year end and again as we mentioned before the biggest portion of the cost reduction going forward is coming from personal and related costs.
So we continue to expect to reduce that for 2021 by approximately 20 million.
Great. Thank you Bob.
Thank you Dave.
Yeah.
Yes.
Okay. Thanks, everyone for joining us today before we close let me reiterate.
The crisis as a big challenge, but it's also a huge opportunity.
We see the crisis as a catalyst a catalyst to focus even more in our customers' needs to differentiate our product improve our competitiveness and positioning in the industry.
No matter, how challenging the times that might be we're taking a positive perspective and hope you do so to.
Many thanks for taking the time see you next quarter and stay healthy.
Yeah.
Thank you.
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