Q2 2021 Yandex NV Earnings Call
Ladies and gentlemen, you are currently on hold for today's conference call at.
At this time, we are assembling today's audience sometime to be underway. Shortly we appreciate your patience and please remain on the line.
[music].
Ladies and gentlemen, thank you for standing by and welcome to the second quarter 2021 financial results call I'm on.
Advise you. This conference is being recorded today Wednesday of the 20th of July 'twenty or 'twenty, 1 we'd now like to hand, the call over to your first speaker today Yulia.
So far and Investor Relations Director. Please go ahead.
Hello, everyone and welcome to Yandex second quarter 'twenty between July earnings call you can find our earnings release and supplementary slides on all eyes on that site.
The key speakers on our call today on the ground for the Verdun, our Deputy Chief Executive Officer, the mutual acre the head of E Commerce and Vita business group.
The plummet and scale, which our chief financial Officer, and Verde, Marchuk, our Chief operating officer.
And if Guinea center of Chief Financial Officer.
Search index taxi will be available on the Q&A session.
Now I will quickly walk you through the Safe Harbor statement.
Various remarks that we make during the call regarding our financial performance and operations may be considered forward looking and such statements involve a number of risks and uncertainties that could cause actual results.
Results to differ materially.
For more information please refer to the risk factors section of our most recent annual report on form 20-F filed with the SEC you.
During the call, we'll be referring to certain non-GAAP financial measures you can find a reconciliation of non-GAAP to GAAP measures in.
The next release of published today.
And now I am turning the call over to the ground.
Thank you Julie and Hello, everyone. Let me give you a quick overview of the key highlights from the second quarter of a restart with E Commerce, which is a key area of focus for us and at the moment.
We are encouraged by the progress the team.
And as making total E Commerce <unk> grew 2.6 times in the second quarter, which we expect to be ahead of our major competitors Yandex market on a standalone basis continued to accelerate as GMB growth to 144% and Q2 from 126% and Q1. This is despite coming from a high.
Based on Q2 last year was the strongest 1 of yandex market with J&J and growing 3.5 times.
We have significantly expanded our assortment and logistic infrastructure. We're also investing time and resources into improving the quality of our service for both customers and merchants.
Important to note that the investments we are making now.
Not only support our growth this year at least half of what we spent in 2021 will form the basis for a solid growth in the future. The Neil will talk more about our achievements in E. Commerce later.
I would just mentioned.
Thanks to the team effort, we expect to grow faster this year than initially anticipated and we believe that our new full year target.
Up to 3 times generally grow with help us to improve our market share and narrow the gap with our competitors of a stronger results and E. Commerce. We're also.
And also supported by our subscription program of Yandex, plus the total number of subscribers increased to $9.5 million in July the <unk>.
<unk> has been particularly focused on improving the share of paying subscribers, which exceeded 75%.
Our strategic goal is to grow the paying subscriber base as fast.
And it's possible that some.
And our leadership and subscription market and to further expand the gap between us and our competitors.
And the relationships between Yandex, plus and our heat transactional services remain highly synergetic, especially for e-commerce and the.
The segment contributed greatly to the issuance of class points and also.
And the fees from the redemption this improves our customer loyalty and business growth.
Plus members generate more orders per customer and enhanced higher JV plus.
Plus subscribers generate around 50% of market and the <unk> and over 70% of loss of the JV and the success of the unexplored.
Also closing a little related to the development of our keen of voice content platform..1 of our latest hit a movie called major grown Quake Doctor, which index co produced was sold on assets and on.
Number 1 and the Netflix global charts in July.
And we're very pleased and in Q2 and a boy's became.
And the leader in the video on demand and market in Russia by both total as well as paying subscribers. According to recent GSK study, let me give you a few words about our key cash generating businesses advertising and the ride hailing starting with advertising and our core advertising business performed extremely well.
And if they are seeing a recovery in our and revenue growth on a normalized 2 year stack basis, driven by strong performance in search and on the organics properties and this has been supported by macro recovery as well and improving search quality, our AD tech investments and progress with the F&B in June we rolled out a new.
And update with more than 2000 improvements, which among other things help us to reach a record higher share of 59, 5% on Android in Q2, 2021, and we're encouraged by the progress with Smbs and our simplified subscription AD product, which already generate over 20.
The percent of all new clients for Yandex.
And then continues to be our key platform for video and develop the media content has become the top generator in terms of time spent outperforming articles the.
The share of video time spent increase of 25% in March 28.
Search and in June and is continuing to enroll.
And we're also continuing to invest in AD tech to improve the efficiency for our clients and to further increase our market share.
And we recently launched campaign and visa, which not only helps advertiser to simplify the process of great.
8% AD campaign, but also demonstrates solid retention rate for new clients of the Yandex AD business higher than those achieved by the professional interface.
And with this and a number of other improvements and the share of our AD revenues based on CPA conversion strategies increased from 20% in Africa.
Great.
25% in June.
Within the Yandex AD network, specifically the share went up from 30% to 40% and the same period.
Thanks to the efforts, we have seen a faster than expected growth of our advertising business, which again allow us to upgrade our expectations.
After the full year sits on the we will talk about this in more detail.
Continue with the right talent our year on year growth was of the high given of a low base from last year, but what is important and that we're also seeing and improving 2 year stack growth for both Wright and <unk>.
The Neal will share more details about the nature of.
And this quarter, we disclosed on the adjusted EBITDA margin for our retailing business for the first time I'm extremely proud of all of the progress. We have made since of course became profitable at the end of 2018, making kind of on the most efficient ratio and company and globally with a mark.
Margin of 3.5% of <unk> overall, we're very confident in the growth and profitability prospects for the ride hailing business as well as in our market position together, our high margin advertising and the right talent businesses should allow us to continue reinvesting into new attractive growth opportunities.
<unk> and to expand our total addressable market.
Lastly, our sales driving group.
We signed a partnership with Grubhub for a robot delivery in the U S College campuses and Grubhub partners with more than 250 campuses across the U S with a population of over $3 million Yandex.
The mix will act of the delivery of management the company and the first few hours are now being sent a grubhub and we will be a rolling all of the services that selected campuses. Later this fall these partnerships either of them to national validation of our technology and proof of its competitiveness versus other local and global players.
And demonstrate the quality of our autonomous technology and shows that we can tap into a substantial addressable market beyond the existing ecosystem.
In conclusion I wanted to say that we are focused on investing in future growth across many verticals, including E Commerce media services cloud so driving.
Kind of Fintech.
And all of the segments, we see an opportunity for yandex to become 1 of the leading players and we expect our investments to translate into a market share gains and creating additional shareholder value.
With this let me turn the mic over to the new.
Thank you, Tim and Hello, everyone.
Driving the second quarter was another excellent quarter for the E Commerce and direct sales business growth let.
Let me start with the commerce business and have delivered a strong GDP growth of 155% of total e-commerce and what happened for the for Yandex market alone. Despite the tough comparison with prior year.
And the fill a further acceleration of <unk>.
And July with total E Commerce unit increase of approximately $2.8 to 2.9 times in Q2, a share of <unk> in Yandex market increased to 70 per cent compared to 56% a year ago.
And of market all of those were up a 140% year over a year and reached $6.9 million.
More importantly, we have seen a solid trends and all of the frequency and the average orders per active customers in the yandex market and increased by approximately a 10% compared to the first quarter of 2020 of them.
And keep improving.
Continuing the exit and integration of mentioned from price comparison to marketplace categories for a consumer.
And the extent of plant FMC as well a significant part of gifts category have been moved to CPA on reform and during the quarter and.
As a result, we stand of our positions and the top categories, especially in the capital of Citrus based on our internal estimates of near the close of jewelry GAAP as our key competitor and Moscow.
And have achieved.
And the impressive expansion in a certain.
And just 3 months since the end of the first quarter total number of sales increased by $4.5 to almost 17 million.
Please note that our price comparison experience and allows us to more accurately avoid double counting and the number of sales compared to the standard market practice.
Okay.
Some of the material progress and logistics infrastructure debt.
Total fulfillment capacity reached 257000 square meters across sales warehouses, and another 32000 square meters across more than 51, and <unk> of course et cetera.
If you go on OLED mentioned this investment will not on the support our growth and.
And the second half of the year, but will form the basis for it with expansion of our businesses and the fusion.
Delivery of metrics also saw significant improvement and we finished the second quarter with over 70% of all the delivered by our own platform. This is compared with less than 50% and March 3.
Remind.
And you all of last mile delivery provides for the best customer experience and has lowered the fixed rates, while higher share of our own delivery allows us to improve the quality of service for our customers.
Improving the quality of service for our merchants is a top priority for us we have streamlined and merchant onboarding process and.
And with now text on the 7 day to start selling on our marketplace. The.
And is a 3 day improvement in January as we saw encouraging results and the gross of audience volume of traffic improving the efficiency of operations and mentioned to the experience of working with US we began to increase take rates.
Since early July we have increased our.
Based commission from 2% flip previously to a range of 2% to 9% depending on the category. Nevertheless, it is important to note that even with the New Commission rates Yandex market remains the most attractive marketplace for merchants relative to our key competitors and we expect the take rates increase to help us gradually improve unitek.
And mix going forward and conclusion I want to highlight that we are confident in our strategy and E. Commerce as we see good progress on GDP growth and the other operation metrics. This indicates that our investments are beginning to pay off.
And to reflect our more of a big outlook on this business, we upgrade our full year guidance for total.
The E Commerce JV growth for up to a 3 times from 2.5 times periods.
Moving into the Q2 performance of our strategic services.
Despite high base of comparison with the second quarter of last year of each and Lufkin demonstrated solid growth.
<unk> orders grew 50% and.
<unk> and 50% of fee year over year.
On the 2 year CAGR basis orders were up 74, and <unk>, 87%.
Growth was driven in part by our in restaurant and user acquisition as well as by the growth of our E. Gross a vertical whose share is 14% and total if orders.
And 19, and JV and Keystone is a.
Introduction of share delivery fee for the first orders of new users earlier this year associated solid growth of its user base.
Monthly active users were up 4% to 3% and Q2 compared to Q4 of last year.
According to internal estimate.
Our investment and user base and E grocery vertical in particular and allowed us to grow faster than our competitors and Q2, we expect this investment to position us well deoxidize 2 year stacked growth and the second half of 2020 volume.
Speaking about luck by the end of Q2 gross capex of.
<unk> hundred 62 on desktops, and up 82 stores compared to Q1.
Half of the <unk> stores were opened in Moscow and tentacles of book as an increasing number of tourists and reached peak capacity due to the high demand and the capitals.
Lots of orders and consistent year over year, and the second quarter and 25%.
300 of the first quarter.
Orders per Doctor per day increased 45% year over year, while cash plus all other than 1 year grew much faster than the average in the range of 80% to a 110%.
On the frequency per user has also grown.
<unk> the 20% of.
Compared to users or the more than 8 times per month and contribute over 50% of luck and Jamie.
Most loved and it benefited from enhancement of plus offering and the services.
Currently 40% of each users of 70 plus percent of half of the users of Yandex plus subscribers.
The <unk>.
Fluffy and a plus user is 44% higher in E and 33% higher and Lufkin.
Now to taxi.
And Ken and transfer of very encouraging and kettle.
On a year over year basis price increased 104% and <unk> was up 160 <unk> percent on the backhaul.
And we per person based.
On a 2 year CAGR basis, our revenue grew 37% and right and 43% and Jamie.
And the second quarter <unk> continued to grow faster and that is there a supply and digital constraints persisted amidst a substantial recovery and consumer demand during.
<unk> gross was also supported by growth in non the economy tariffs and share of each increased by approximately 200 basis points and June versus March.
As I mentioned on the earnings call and therefore, and Q2, the investment and driver acquisition in order to maintain the high quality of the service and facilitate the first penetration of ride hailing and the.
The low conduct of our users.
We see the types and can become a habit on mobility service used by 30 million people across all our geographies.
On average our edified the complete 6.5 <unk> per month on.
Our cohorts continue to grow 2018 cohort is currently at over.
The $7 per month, and Russia, and approximately 11 rate and the share.
While 2020 cohort is approaching sunrise per month, and Russia, and the API and the shares.
E better cohort and the region is less developed public transport infrastructure, and we expect coverage to continue to improve in line with the regional growth.
Well as is increasing the frequency of use in a mature markets. Overall, we are very excited about the prospect of rice and beans.
Now turning to Yandex delivery and our last mile logistics solution for both individuals and business select.
Monetization model of our last mile delivery businesses is.
A very similar.
What we have and have Shannon, we take a commission from the total transaction amount that we received from individual users and b to B class for delivery services.
This <unk> business, which is focused on building its own driver and curious supply a June we had over 24000 active drivers and curious per day, well analyze deliveries.
On rate exceeded $73 million.
On a daily basis, we did over 200000 deliveries and June.
46% of which came from the clients, whose number reached 19.5000 and June let's exclude SMB clients, which are responsible for another 30% of deliveries.
And as well, yeah, and and other stage of the new redevelopment with the strong demand for such services across a wide range of index dislike E Commerce, social E Commerce, and general classify gross tariffs and regulatory changes as well as a garden variety of business correspondence.
This indices are expected to grow significantly.
Over the next few years, while we plan to increase our share in each of the synthesis up from the current level of low single digits.
On the part of debt. The team is currently focused on developing the same day and the next day delivery services as.
As of a significantly increased batch and efficiency.
We expect to reach a 1 million delivered per day.
And 2000 and tend to free.
Overall, I'm very proud of what mix of achieved across a diverse collection of our businesses all of.
The issue of exciting growth opportunities ahead, with this and turn the mic over to settle on.
Okay.
Thank you and the heel and Hello, everyone I.
I would like to start.
Start with a comment on our approach to disclosure John.
And as well as detailed and consistent disclosure is obviously, a crucial particularly as the complexity of our business increases we have taken an important step forward by disclosing all key performance indicators for a different businesses within the texture of what.
<unk> updated our investor presentation.
<unk> and the channels, which now include a significantly expanded range of calculating and financial indicators and all of his more detailed disclosure of by segment.
And we'll also recently published our first sustainability report.
We trust that this more on Baas disclosure will benefit our investors and we will continue working.
Onshore the improvements as we go forward.
In terms of results, we delivered a solid 17% like for like revenue growth this quarter driven by strong performance across many of the articles.
Based on a rapid recovery and advertising and ride hailing and not only because of the low base effect.
But also on the back of the economic rebound as well as a strong execution, which is reflected and steadily improving 2 year stack trends.
We continued to see strong growth in yandex market, mainly of services and food Tech. Despite the high base effect of last year.
Our 2 largest businesses.
Advertising and ride hailing keep generating a high and stable cash flow of.
Which we are able to reinvest and other attractive and fast growing segments. We will continue investing while of course, maintaining financial discipline as well as stable and improving margins and these 2 businesses.
Let me walk you through the headline financial numbers for the quarter.
Our search and portal revenue grew by 54% year on year, such fast growth is obviously affected by a low base effect from Q2.2020.
But it's important to note that we also accelerated growth on the 2 year stack basis the 16%.
Now in Q2 from 13% and Q1.
The industry Wise. This acceleration was primarily driven by the following sectors ATI and telecom home appliances consumer electronics and healthcare is a.
Now on the 2 industries remain in negative territory on a 2 year stack basis travel and real estate.
And we're seeing continued solid growth in July.
Though the year on year dynamic is lower than Q2 due to the digitally higher based from Q3 of 2020, when we began to see and improvement in average revenue growth.
2 years debt remains around mid teens.
Taking into account recent trends and the stronger than expected.
<unk> performance of our AD business and Q2, we're upgrading our full year 2021 guidance for search and portal revenue growth. So the mix weighted up from our previous guidance in the high teens.
The adjusted EBITDA margin for Q2.2021 came in at 46.
The 2% versus 43% and Q2.2020 the.
A selection and improved operating leverage effect, partially offset by investments in the AD Tech.
And our search market share and support of Yandex plus.
We expect margin in the second half to the higher than in the first half due to seasonally.
$6, a stronger revenue and continued improvement of online and industries.
We are confident in our ability to deliver a stable margin and search and portal for the full year compared to last year.
During the vaccine and <unk>.
Hailey, we delivered $4.7 billion rubles.
The Lee of adjusted EBITDA, which made a meaningful contribution to the group results this quarter.
Our adjusted EBITDA margin, including all of a hats came to 3.5% as a percentage of GMB.
On our estimates this was the highest among all global public peers and reflects our solid execution.
And the duration of our efficiency.
It is important to note that these results were achieved despite a material increase and our investments into the stabilization of driver on their supply.
And the <unk> Tec, we continued to demonstrate solid growth. Despite the high base effect, which we believe is.
Related to a change in consumer behavior, and habits, and low penetration of the services and Russia.
The adjusted EBITDA losses of peak this quarter and amounted to $3.1 billion rubles. This is the cost of our investments in the scaling up our grocery delivery model and its as well as an increase and delivery CBO.
And the Bureau on the back of career capacity of concentrates we expect the losses and for tech businesses to come down and second half compared to first half on the back of growing order density and improvements and efficiency.
Turning to Yandex market.
As the ground and then you already highlighted the have accelerated.
<unk>, our GMB growth for Yandex market this quarter. Despite the high base effect, we expect to deliver faster growth and the second half, which is reflected in our upgraded full year guidance.
The achieve such sales growth, we have to increase our investments our spending is evenly split between customer acquisition and retention.
<unk> and our logistics infrastructure Scaleup.
During the quarter, we expanded our warehouse footprint by 70% and nearly tripled our owned and operated last mile capabilities.
The utilization of this capacity is lowered the start but will gradually improve as we grow the scale.
Our durations with and adjustment to reflect the relative underutilization of new infrastructure in the initial period, our unit economics increased by 5 percentage points throughout the second quarter with improvements each month.
We envisage this positive trend of improving unit economics.
And of continue and second half.
Supported by increase of take rates and capacity utilization.
E Commerce remains 1 of our key strategic priorities given its large total addressable market and attractive growth opportunities and we're confident and our ability to become 1 of the.
And the players in this space.
And internally, we're very pleased with the progress achieved so far and are prepared to invest more.
Especially in this investments translate into and acceleration of growth improving competitiveness of our product of <unk>.
The 8 and efficiency and increased shareholder value the.
Apart from investments.
The region into our current stellar growth this year way of investing into the foundation for future business expansion, including our fulfillment and logistics capabilities. Consequently against the backdrop of the strong performance to date, we feel reassured that accelerated the investments now will yield sustainable outsized growth.
<unk> forward and thus plan to invest more than initially budgeted.
Revenue of May day services, classifieds, and all key verticals within other business units and the initiatives of all more than doubled on a year on year basis, while cloud and devices are growing at 3 times.
Go and build the amount of investments across the businesses increased compared to last year. The unit economics improved for almost all of them.
More details on the businesses are available and our press release.
Let me finish with our 2021 financial outlook.
We are upgrading our full.
The group revenue forecast to a range of 313 to 340 million rubles on the back of faster than expected growth across key business units.
Revenue growth guidance for search and portal is upgraded from heightened the mid <unk> and.
And we reiterate our.
Full year of stable segment margin for the full year 2021, compared to 2020 of them.
We now expect our total e-commerce JV to grow at 3 times, which is faster than our previous guidance of 2.5 times for the full year 2020 of them.
We expect a ride hailing.
And <unk> to increase by around 60% for the full year.
With this let me turn the microphone back to the operator for the Q&A session.
Thank you.
Ladies and gentlemen, if you would like to ask a question. Please signal of by pressing star 1 on your telephone keypad.
If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment and please limit yourself to 1 question and 1 follow up question the <unk>.
First question, we have today comes from the line of Fiat just left the tariff from Goldman Sachs. Please go ahead.
You think of as much for the presentation.
The question.
Talk about the first of all and on the E Commerce.
So you have an update on the E Commerce, JV outlook, which you increased the.
Is there a better visibility on the investments for this year.
Looks like Directionally, you are willing to spend more but how would you contextualize the versus your initial guidance.
Couple of hundred before $500 million of investments.
The 'twenty to 'twenty, 1 and even probably more importantly, a how do you see the investment outlook for the medium term at least Directionally do think investments will increase and in absolute terms in the coming year. So a decrease.
Well. Thank you on for a question and.
To be honest a personally for me it was probably 1 of the most important questions. So for the last 2 months.
At the moment as you know, we're growing faster than expected a versus our own expectations and and our internal estimates we believe we're out.
At the forming of the peers and gaining market share a it's actually a means that to a plan to invest a around $650 million. This year more than we previously guided but the real allow us to grow 33% faster in terms of JV this year as well as.
And our almost half of the expected of jewelry a growth next year.
About half of this investments a either on the expansion of all logistics infrastructure warehouses sorting centers and delivery capabilities.
We expanded a warehouse capacity by 1.8 times a during the quarter.
It took on a 2.257000 of square meters and we will finish the year with over 300000 square meters of just warehouse space all of a.
A sorting centers, a total logistics capacity will likely to be even higher a.
Currently we have a 50 of sorts and centers versus 'twenty.
Water a in the end of the first quarter them, who have invested in our own delivery platform and expanded our parcel of Williams processing capacity by 4 times a.
Since the beginning of this year and significantly improve the alcohol at him.
It starts and understand all of this on your infrastructure.
And a under utilized.
But it's just a temporary issue.
And it puts pressure on our unit economics, but we already see a positive flow dynamics. If we just on under a utilization of new infrastructure and the initial period, our unit economics increase.
As usual a 5 percentage points a throw in the second quarter with improvements each month.
We also.
A invest a in business expansion and full system improvements, a and warehouse automation and all of this a developments will help us to boost a utilization.
So and then our unit economics.
It's also important to remember that the investments, we're making now and not only allow us to demonstrate foster the unexpected growth. This year, but also form the basis for the future of rapid expansion of all of operations.
If we look.
A S. A the next year and going forward.
Of course E. Commerce is our biggest point of growth and a considering the gross of the business size of the market opportunity as well and as the improvements in quality of offering and unit economics, we are committed to allocate.
<unk> substantial capital and all e-commerce initiatives.
A it's a probably a hard to estimate exactly a amount of investments that we'll make the next year and beyond but let me put this a wait taken into account infrastructure objects lead time tragic story of growth.
Compared to a different environment and against the size of the opportunity. It is reasonable to expect comparable spending on E Commerce, a initiative and the near term and.
And the exact amount of investment and depends on many factors, including competitive environment and Mark a situation, but you can be sure that we are reviewing all of the development.
On a regular basis and rationalize on investments against our progress on.
We're seeing promising trends and unit economics, which adjusted for a infrastructure a lot of course, a improved AR as a core of dimensions 5 percentage points during the quarter, a which is the 1 you is a very.
The good progress.
Also on a highly satisfied with the close to and truck and we closely track our progress on <unk> and quality of operations.
Fourth months of and cohorts improvements a value creation a through plus a.
And as well as of course, a market share gain and a further.
And those metrics a little 1 our ongoing commitment to investing into e-commerce further.
All of the strategic goal as you know is not only to become the number 3 player but to make sure we're constantly improving on market position and closing the market share of gift with all kinds of just a competition a when it's a.
To make the journey, which took a there's many years significantly faster, but the value of the opportunity justifies the speed and the investments.
Okay. Thank you had a much for the detailed answer my second question would be on the a self driving car basically the partnership with the graph on.
On the Rover robots.
So would you consider a similar type of a international partnerships on the side of the self driving technology and specifically on the side of the car segment is.
Is it more difficult to agree on those kind of partnerships on the self drive a driving side versus the other oversight.
It is a due to the complexity of the technology.
Or a lack of a real use cases, I'm not a lot to apply or maybe and you all of the reasons. So any color would be helpful. Thank you very much.
Hello, Hi, this is why I didn't listen to take this 1 so look I think during the N D. R. A earlier.
The summer you were too.
Talking.
You know about self driving technology because of the raw, we're a technology right and 1 of the points, we were making was that and we believe that our albers.
Is the product.
And that if we can monetize earlier compared to a self driving cars and this is due to the much more complex.
Regulation that exists frankly, it doesn't exist yet for self driving cars rumors on the other hand, the travel a much slower theyre much smaller they do not present danger to humans et cetera, et cetera, and therefore, the sea Grubhub partnership is something that allows us to.
Test a skill the the.
A user case, whereby the role of will actually substitute a career right for the last mile delivery of whether it's going to be you know food from restaurants, or maybe you know like small parcels et cetera for E com and if you looked at the announcement of itself right I mean, we.
2.
Partnership with Grubhub, a campus, which operates a 250 a university campuses in the U S, which I think has a combined population of around 3 million students. The cool thing here right the role.
Where's the usage of somewhat and.
More limited use case, because they can only get to the building.
<unk>, but the cannot go up the stairs and it works perfectly well in campuses because of the queers typically are not allowed to enter dormitories and therefore, the students are used to come down the stairs and pick up of food. So this is gonna be similar a user experience right, we're not going on.
Sacrifice a year of experience.
Did the in exchange for combining with the robbers now going back to a as did you sell driving a.
A group right.
Even though I did mentioned earlier that the regulation is going to take longer.
For us to get there.
And as a country by country at the same time and I do think it's.
And I mentioned that in Russia, there was a new federal law and that was recently signed which established a regulatory sandbox.
For a call it digitally innovative products.
And projects and we plan to use this opportunity to create a regulatory sandbox is to in some places to switch.
The importance to completely and fully autonomous taxes and.
And maybe even launch a.
And kind of you know a fully autonomous taxi and 1 of the more school districts. The launches of those products of projects is a function of a government approval of those specific projects.
Switching had a much.
We will now move to our next question from Cesar turnaround from Bank of America. Please go ahead. Your line is open.
Yeah.
Hi, everyone. Thanks, so much for the for the call and the opportunity to ask questions.
I'll ask my first question on the on E Commerce.
Whats your long term ambition for <unk> versus <unk> and how long do you think you need to get to the that's the right mix.
Because this is probably 1 we should start to see some re acceleration of E. Commerce revenue now talking about <unk>, but the revenue. Thank you.
These are high and this is why didn't let me take this 1 as well look I mean, it's it's a very good question and I think we wish.
And you would know the future we could debate on what is the ideal or waters of the kind of of the end state model would be for any you know a large marketplace and what the proper combination.
Combination and the way, we think about it obviously from a perspective of the.
And from a perspective.
From a perspective of a kind of the user experience right.
For us too and the thoughtful from a perspective of our economics in order for us to maximize.
On our P&L and our kind of units.
Unit Economics, we will obviously would want to have more of <unk> compared to 1 and the same time, they're going to be focused on balancing the revenue mix to maximize customer 6 dissatisfaction and user experience assortment gross and economics and at the same time, we do need to have 1 P. In order to make sure that the fully.
Cover the.
The whole shelf of Skus and the highly demanded and highly thought for products a present on our marketplace and therefore, you know if you're doing it to have some of lumpy the to drive a 3.
<unk> in the correct direction.
Thank you so much of that was debt.
It was a very clear and then just a follow up on on E. Commerce. What was what has been the initial response for merchants and the and your competitors as well on the increase in take rates and do you think there's a there's room to further increase those a little.
Take rates and the future. Thank you.
Hi.
And this is lightning and yet again so look.
And you did increase our take rates right.
And this is coming after a significant decrease back at the beginning of the year and I think we spoke again at the same road show that I referred to.
On slide 2 that we had was U a.
Earlier this summer the way we think.
And think about take rates right and this is just 1 of the components of overall product form merchants right. So you shouldnt only look of the kind of a monetary terms you also need to look at how much traffic, we are providing and know how much cash support for them how easy it is to get onboard it's on our side how easy it is to actually elicit the products.
I see the our properties etcetera etcetera. So when we think about take rates right as you improve other components of our like merchants a platform.
And we feel that the can.
Can increase our take rate of swell. So if you were kind of around 2% flat across the categories now.
And now we're between 2% to 9% depending on the category and that increase happened since July the.
The way the day.
The.
The response from the merchant so far has been fairly constructive we more than doubled and the way to think about it right the more than doubled the amount of business.
Alex and that of all of them since the beginning of this year and our other components of our.
Of our offering to the merchants.
A continued to improve and therefore it you know on boarding improved the continues to streamline our processes. So frankly, we haven't seen.
And so that's much of kind of complaining and they're fine with it in terms of what can be done in the future sort of look let me say the fall and we still remain the most attractive in terms of pricing on the market right. Now obviously were how far we can go in the future as a very much a.
As of the.
Is the the.
Seeing the Asian of what our competitors are going to do and at the same time, you know how well are we going to improve other components of our merchant offering.
Thank you so much very helpful.
And we'll now move to our next question from Vladimir a best of luck from VEB capsule. Please go.
Go ahead your line is open.
And Hello, and congratulations on the number and thank you for taking my questions I actually have 2 questions..1 is on the ride hailing and profitability profile voice.
And we see some decrease in the EBITDA margin in the second quarter of compared to the first quarter, even though the margin with it.
They are quite high so maybe could you provide some color what is behind this and being changed on how you are going to manage share and to balance investments.
And and managing competitive pressures and growth and things like the plus and <unk> and <unk>.
Still there and in addition to these east the March and debt you showed in the second quarter of kind of sustainable in the short term or in general how do you see the tragic toria lets say over the next the 1.2 years for a tailing and my second question of will be on E Commerce, if lease fleet and.
E Commerce exposure.
And to Yandex market and the grocery and.
Yeah on the market is accelerating but the only grocery if a look both year on the year end day and quarter on quarter. There is some kind of slowdown maybe could you comment what the what's going on and be able.
It looks a little bit counterintuitive.
And given that you expect the fill the acceleration of the total and <unk> in e-commerce in the second half of the year how old. The this is gonna be split between the yandex market and the grocery exposure. Thank you.
He led the numerous yoga and eager to hear from you.
Let me tackle your question on ride hailing and I'll pass it onto the to the rest of of the team on.
E Com. So let me walk you through it's a sort of the trends of what was happening in the second quarter.
You may remember that on the call of last quarter, we mentioned that a profitability.
It was.
A very high but it was also held by unusual even for Russia, snowy and cold conditions.
On a period of time and the first quarter and that certainly helped profitability and the said it's unlikely that it will stay that high for the year.
And then in the second quarter, we also invested $1.4 billion rubles.
A lever incentives and acquisition and also.
The vaccination initiative sort of to address the.
And the increasing level of under supply and the system and driver and a supply remains a significant issue for us and the whole market.
The borders remain closed and.
And we're also now facing seasonal competition for the other industries.
And such.
Such as construction and agriculture.
But.
Given our initiatives combination. This we think we brought under simple a down to 20% level versus what it would've been something like 40%, if we haven't done anything and haven't invested.
And this 1.4 does not.
Not include the cost of competition with Didi and the second quarter, we don't really break down for obvious competitive reasons and how much we invest in that.
Got you.
A D day launched in 2020 a.
In the cities, where the sort of there.
The initial lunches happen and we think their share has come down to half of what it was.
And at peak times there.
The recently launched and 20, new cities and May in Russia, and that probably represents something like 10% of our total G E.
But have you seen we've been very efficient and effective and competing with them across all geographies. I think this will remain the case of.
Obviously competition.
A comes with additional cost, but a I think our experience demonstrate the these costs a limited in time and they actually expand the total market and market leaders actually benefit from a sort of trip inflation and a pressure on smaller players.
So Eric.
Ergo in June our rights grew 76% and those 20 cities, where the lunched a while total of rides grew something like low sixty's year over year.
But all in all of a you know our EBITDA margin a you know.
Including overhead costs as well already launched a mentioned on the Peru and you know on initial remarks that came on at 3.
Tissue and sent a a JV.
And we believe if we're not the most efficient and that was certainly 1 of the most efficient a ride hailing companies globally versus our public peers, our operational expenditures and HR costs, a half of our closest public peer as a percentage of the Jamie and this allows us.
And a half the 1 of the most profitable ride hailing companies since 2018, and that's despite you know lots of maintaining a low effective take rate and you know a 10% of below.
Now looking to the second half of the year, we will invest and driver supply, we will invest and vaccination initiatives and and we will focus on key new social initiatives.
To be for drivers and couriers because the world.
However, all things being equal and we think of adjusted EBITDA margin as a percent of Jamie in 2020, 1 will increase versus 2020 of course, barring any sort of very significant changes and the competitive landscape.
We're in a severe.
Adverse COVID-19 related.
<unk> measures a we believe you know looking forward that ride hailing has substantial room for growth in Russia and be on and going forward. We will continue to improve operational leverage and benefit from our efficient cost structure.
We will reinvest a portion of that and growth.
Uh huh.
And but we target to improve profitability each sequential years and the next few years, you know again, all things being equal and as you know we have a successful track record and balancing investment versus growth and ride hailing and we plan to maintain that.
What do you mean, a this is not even speaking let me say.
Good question with respect to food Tech and E com, So look I.
I mean, it's it's it's I mean, if you see your point right. The the thing what would you do need to consider is that there was a multiple effects right that a kind of combined and the numbers that we reported so when you think about our food Tech is essentially a consist of.
And you saw a 3 all lines of business. So the first 1 is yandex eats which you know the the usual delivery of a food from restaurants right and the second 1 is laska. Our you know a hyperlocal dark stores and the third 1 was just you know kind of the news of business that we have is the E grocery a component of yandex.
And eats whereby users can order groceries from a you know kind of the retail chains that they're used to now the all have somewhat different dynamics. So first and foremost do keep in mind that laughter and yandex eats the restaurant.
Component, where beneficiaries from the Covid situation last year so.
So when you look at the growth rates. This year, you do need to keep an eye and just you know.
And I understand that it'd be a comparing to a pretty tough comps last year, and therefore already growing from a high base.
The day the second thing here is that.
As we already you know our guidance suggests we expect.
Fact that and we expect that overall, our e-commerce, and <unk>, which includes our marketplace laughter and.
And so a yandex eats a portion of a E grocery delivery is going to grow overall 3 acts on a year over year, we don't really disclose the split between.
And it says and we would prefer not to give such a detailed breakdown on line by line.
Thank you very much.
We will now take our next question again from CS Archer on from Bank of America. Please go ahead. Your line is open.
Between.
Yes, hi, guys. Thanks for taking another question for me just wanted to ask also on the on taxi a taxi regulation and Theres been a couple of press articles, suggesting some potential.
A patient to a driver working hours and a couple of other regulations do you have anything to.
The sound on the things thank you.
Well, let me take on the driver hours and then I'll just speak more generally about the initiatives, but instead of.
We believe the Moscow and other municipalities will follow the best practice measures.
In line that all of.
That would have been a implemented a number of markets around the world, including U S and Europe and assuming the system develops along those lines and this was definitely a contribute to increase and safety and we support this but with also a thing it will continue to be satisfactory from an economic standpoint for drivers and fleet management companies and for us platforms.
As for a sort of a wider a ride hailing.
Social benefits discussion and initiatives.
First of all we're monitoring and drive our earnings on a region by region basis, and it's very important to note that income received bar drivers inquiry or is significantly exceeds the minimum wages and Russia.
Sure and often matches or exceeds the average income in a particular region.
And in terms of social benefits, we have already pioneered a number of measures. We think those will set the standard for the industry as a whole. So for example in March this year.
And we started to provide an option for self employed a voluntary.
Inventory of join and insurance program, which provides payments covering sick leave a.
And going forward, we plan to provide a number of insurance and other products with varying degrees of coverage, which self employed will be able to choose depending on what their personal needs.
And remember, Russia already has universal health coverage.
And that's not the only the example, you know we were at the forefront of developing the self employed employment and concept together with the authorities are now on our pool of you know we have nearly 100000 and self employed and drivers and careers on our platform in Russia. The total number is approaching 3 million.
A we were the first ride hailing company in the country and introduce accident and insurers for and try to accident insurance for drivers and passengers significant coverage a despite this has not yet been legal requirements and the industry still and so we're in constant dialogue with authorities at all levels of where these issues.
And we believe our relationship with them is constructive and inefficient.
And let me add a little bit to the this is what I'm speaking so look I mean as the Zen is just kind of you know appointed allowed tenants listed on the.
A set of examples look of the key you know.
Obviously all of US you know kind of seeing what's happening in China, right now right and a.
And I assume like a lot of and the Masters and you guys.
And you don't have questions on your minds, whether you know something similar will be happening and Russia et cetera, et cetera, and you know the way, we think about it and the way we approach it the key to all of those discussions is to be proactive right.
So a taxi is a perfect example of where we actually you know on where it kind of initiated discussions and stayed proactive and try to prevent or for a seat some of those kind of conversations and come with a solution to the state rates and overall on the broader kind of group level be seeing no changes and our relation.
It's all of it is the relationship remains open and constructive I mean, obviously in Russia as and any other country. There was a lot of discussion right now around the digital platforms digital ecosystems and you know this is understandable because you know a digital platform side, becoming a.
The larger and larger part of everyone's life.
Where the weather is going to be related to data, whether it's going to be related to social activity et cetera, et cetera, whats happening and Russia right now the authorities, obviously would like to focus on building a clear framework to resolve any conflicts to help innovation and accelerate the development of the digital economy and the same time the the state.
And is a quite explicit and in their statements that the national economic development requires the support.
For a local service ecosystems, because we do need to compete with you know a global tech platforms and E.
If Russia and wants to maintain their uniqueness of attack.
Tax sector going forward start of the.
<unk> understands that and the willing to support the platform's here.
Thank you that was a very helpful.
And my name is.
The next question coming from Kirill Panarin from Renaissance.
Your line is open.
Yeah, Hello, everyone and thanks for taking the questions 2 questions. Please firstly on search profitability. So you break your search revenue guidance already twice this year and I, just wonder why that didn't translate into a stronger margin outlook versus your initial expectations.
Are there and your investment areas, which you didn't plan and the beginning of the year. That's the first question and then secondly on Yandex plus the number of subscribers was flat quarter on quarter and.
Is that explained by seasonality at all or maybe you see and increased churn and any any color. There. Please and also could you.
Share some data around the the mix between single and multi subscriptions of what's the share of loss of subscriptions and what's the average number of active users fill up per per multi subscription and that's it. Thank you.
Yeah.
So to start a on a and revenue growth a there is still uncertain care on Covid and all of the cases starting to pick up a in June as you know so all of a had a lot seeing a so much of a nimble yet.
But still a possible situation escalates and the based out of.
A vaccination of a little bit slower so a second half of his and the stronger than first half of which is a reflected a in our guidance a well. So I E. We also see our occupancy and revenue declines and so that all support the of revenue growth.
And search and portal on margins, we expect margin.
Margin and second half of a the E ought to be higher than the first half a due to seasonally stronger revenue and the continued improvement of online and industry of course.
The optimization and efficiency improvements.
And sort of if I may continue and just to sort of wrap up the first.
A question. So look I mean your question is right right I mean, if the growing faster and you would obviously every additional ruble of our revenue comes you know it was a kind of.
It was a greater incremental margin right 1 of them of the things of that we've tried to do a swell is to continue to re in the west for future growth and at the same time of keeping you know our.
Our search and portal and margins pretty.
A pretty stable you know on the.
Current levels and 1 of the things that when you kind of mentioned during a script is some of the initiatives that we have whether it's you know a new AD tech and focusing on the CPA based conversion the instruments.
Well, there's going to be campaign Wizards for you and I was kind.
Smaller clients the kind of the debt.
Asking for a simply instruments et cetera, et cetera, and B C and results of those kind of investments into additional gross so for example, and the share of CPA based conversion of instruments is already exceeding 25% right and this is something.
Something that's the advertisers a paying for a specific action that the want to optimize as opposed to you know for a simple click.
And that is a much easier to understand and more transparent tool for advertisers and therefore, what we're also seeing and be seeing that our share.
Share in their wallets right to use and 3.
And because of the understanding very well what they are paying for a.
Using our at a.
Services.
Similarly, the Lake campaign Wizard right, the Super simple well significantly simply a year.
Tool to manage the process of creating ad campaigns.
Pains and what it really helps it helps with retention and so our clients are staying longer compared to those that use kind of a you know the the professional interface.
Finally, and also you talked to be kept talking about the kind of simplified products for small and medium sized businesses right and this is something.
Something that should be cabos throw a subscription.
The product and right now over 20% of all of our new clients already declines of the coming to the subscription services and.
Another investment that we make.
In our apps.
Kind of you know as a.
Segment is.
Focusing we are focused on improving on monetization by increasing market share on iOS devices, and together with a kind of those.
The system.
The the search and some pre installation and loss. The also do targeted investments into increasing our share on Apple and the iOS.
Those of devices and that's kind of all and all this is answer to question and be outgrowing faster than expected remaining attaining our margin and the reinvesting the additional cash regenerate into search.
And kind of initiatives now going to a second question with respect of plus yes, you're right the growth in this quarter and the second quarter and.
And Yandex plus subscribers did slow down it is a seasonal effect.
On overall, you know like in the second quarter typically peoples tend to spend more time outdoors.
Compared to the periods when it is called outside and.
And if you were to look at what happened last year, you would see exactly.
Similar slowdown, which would pick up in the second kind of towards the latter part of the year.
Great. Thank you and any color on the on the multi subscriptions. Please.
Yeah.
Question, and then what exactly is multi subscription and just let a little less you know agree on a definition here because of this is not something and I mean I think.
Yeah, I think you have some kind of family subscriptions, which and.
And allow several people to to use 1.1 subscription for a portal the benefits of of Yandex.
The kind of.
Look I mean, we do have those numbers somewhere I don't know habit and on top of my hats, how about the become backed with it afterwards, I mean from kind of a personal experience I have a subscription and you know all the members of my family of use it and I have a suspicion that you know many people do the same for their share of households.
Yes that makes sense. Okay. Thanks, thanks of the local nuances.
We will now move to the next question from a DCF from Morgan Stanley. Please go ahead.
Great. Thanks for taking my questions and the first 1 is just a follow up on the E. Commerce again, just on the fulfillment services.
And since this time, what are you kind of and you providing some merchants and how does your pricing on that compared to peers and how should we think about the the ramp up of that and I guess, if we look at some of your peers there at sort of a 50% of 3 P. G. M V. What of your targets in terms of just the share of G. NV done 3 of them fulfillment that say by the end of next year. Thanks.
So a Miriam hi. This is why didn't let me take this 1 sort of look a couple of things with respect to the with respect to the a kind of the fees right. This is something that was covered by the question.
Asked earlier right how much of a recharging.
We are still more attractive.
And in dollar terms, if you will.
Compared to our major competitors.
The way that our gross is supported now right and this is actually quite interesting right because we've been talking about the if you're a bit.
And talking about.
And.
And the purely the significant increase and our Skus right as a choice 1 of the reasons. We were a managed to achieve that was because of the conversion from a because of the conversion from a <unk>.
C. P C to CPA model right, so that allowed us to significantly increase our skews. The reason we were able.
To do so fast is because we introduced a new model, which is called dropship by seller.
And.
This is something that we know on store and therefore, we don't really charge the fulfillment fees, but.
And this is fully kind of a full field and delivered by the merchant of itself. So some of those pieces you're seeing.
On a quite a significant gross there approximately a 20% of our GBS currently done and be a adoption by seller.
And the trends in that particular category, we do expect debt. It will continue to grow but we will be shifting some of those we will be adjusting and optimizing our mix to.
To maximize and maintained the customer satisfaction and user experience.
At the same time, focusing on the unit of the unit economics and capital allocation because keep in mind the dropship by seller.
As a profitable channel for us already today, because we just get a commission on the sale without having to fulfill a deliberate.
Got it thank you.
And then my second question is just on grade 3 so you seem to have ramped up the number of docs towards again and the quarter. So how should we think about sort of a set of expansion from here, particularly expansion outside of Moscow and St. Petersburg, and then I'll say, if you could just share your latest thoughts on the.
And the different models and grocery so that the 1 P versus 3 P model and do you have any changes and your approaches to that or how you're thinking about the mix between the 2 and models over time.
Yes, Hello. This is you have a gaining again so a you know a loft curious currently you know on our.
And you know a hyperlocal instant delivery from dark stores model is currently focused on the dark store expansion growing number of orders per dark store.
I think in our sort of let's call. It a mature regions like Moscow, we see a huge.
Economic improvement and then and we actually expect Moscow to turn profitable.
You know in less than a year from now of a year from now.
And we think and that business sort of the profitability level of it will be in line with offline a grocery retailers a longer term as.
And as far as each grocery a.
Vertical a.
And again, a take rates and this business.
And you know are lower and then in a restaurant and delivery, but higher average checks but.
We already talked about it.
Uh huh.
You know density of orders and use and demand have not achieved the mature levels and this business.
The CPR was very high, especially and we also started.
And Q2, and not only delivery, but pickers and stores and that also negatively affects the appeal a given the low order density and a little currently low utilization rates, but we're making a lot of efficiency improvements a targeted at a decreasing CPO and these improvements are allowing us to decrease CPO.
And each sequential month. So for example in June and the CPR was a 10% below April levels.
And then yeah and unit economics as a top of a unit economic improvement is a top priority for us and the grocery a vertical.
We think it will continue to improve along with our efficiency initiatives as the business.
Started of Roes and as a the order density increases and I'll review on a long term profitability of the gross vertical should be in line with the leading global peers, which recently and have just turned profitable on EBITDA level.
And let me just at a 1 point many.
And as Glenn I think you also asked about the increase in a lot of stores right. So a most of the very significant portion of that increase actually coming.
From the increase of from the opening of new dark stores and the capitals, because our existing stores a really reached the capacity so the.
Way to think about a right you have a way of kind of a certain radius right and your laughter all periods. There once it hits you know on the kind of the maximum theoretical throughput you do need to open another store to surf steal the same kind of radius right. It has 2 components of that because it does improve the delivery time because of the the radios and it becomes.
Smaller for that particular, Alaska, right and you able to a kind of shift some of the orders that you know the first lapka was having a difficult as a serving right to the newly opened locations. So most of the dark stores and said we are open on opened in the capitals in the regions you know we do.
<unk> of open and some of the cities.
Because of the economic conditions, it's got to be somewhat of a different product and we are focused on figuring out the right mix of other regions right now.
That's clear thank you.
The 1 that moved to a last question and that will come from al Dor of election.
And <unk>.
Please go ahead.
Alright, thank you and lunch.
Yeah.
My question was on the 1 was on the international expansion on a kind of a dressing entering new markets. So there's grubhub deal is there a very encouraging and I'm wondering within Europe.
And from VIX and services and quite a few of them a highly competitive on the global scale, which ones are you also thinking about and also which oh potentially areas of all regions are you thinking about and maybe on the reverse side are there any regions, where you may want a a lean.
And with your exposure to it.
Prove economics, they'll build a real vertical I'm talking particularly about the ride hailing because I think youre on.
All of the eastern countries that would be my first question and then if I may I'm I missed part of the Kohl's. The I apologize if it was already addressed the station around on the supply of the driver of it seems like it's 1 of the reasons behind the.
Pull the or sequentially and a reduction and profitability of the a ride hailing and.
And I'm wondering how much of it the structural versus temporary so lack of microns and closed borders which probably is less the case now the.
First is just overall rush to get all of these delivery business by all kinds of plans, which.
The increases demand for Korea's and drive as overall, so I'm just wondering if you see the situation improving with the supply of drivers and the need them. Thank you.
Eldar high I forget it again, let me start and.
The you know I'll start with the ride hailing.
We've actually a you know if we come a look at our sort of portfolio across the taxi business in particular, and we've actually seen a number of very encouraging developments and some of our markets. So we're very strong obviously and the former Soviet Union, but we've seen for example, and Finland.
And you know, it's not a huge business, but you know its economics of improved significantly over the past year or so.
So we will look selectively and very carefully but at certain markets, where and we think we have a competitive edge or a competitive advantage and entering.
At the same thing you know all.
Drive business for example, a has developed certain a accelerate skills, which are actually becoming very valuable and they're interested and the global market as a whole for example, a we have leading fleet management software as well as a hardware a developed a and we think we have actually a very globally competitive program product.
The rehab some initial inbound interest and so.
You know we will.
And we'll approach international expansion very carefully we're focused on our core markets, but certainly the interesting ideas or a certain markets, where we think a it could be interesting we will develop.
And a it'll be out of let me add to this this is let him speaking so look I mean, I think probably kind of you know if you wanted to think about international opportunities for us and more general terms and I kind of a you know the bigger picture I mean, you did bring up a the the drop hop kind of a partnership that we signed a earlier last months.
The way, we think about our opportunities or you know the windows of opportunities for us.
If you do think that in.
And places whereby there is kind of call. It a new business models. So for example of cars right.
This is something that is currently being developed in western.
And Europe and the U S a.
And.
Actually somewhat later than it started being developed by US here and Russia, and we do think that we could have an edge on.
And with our ability to kind of routes the careers.
Do the warehouse the <unk>.
All of warehouse management system, it's actual et cetera.
True.
War weather.
This is 1 category of the new and kind of a business models that are actually emerging right now and the second 1 where everything that could have on ACH is kind of you know.
Cutting edge technologists, no pun intended.
And where everybody is there was no established market yet and so forth.
For example, Rover as Digi would be a good.
Good example, a third category is kind of a very high tech R&D heavy busy.
Businesses, such as cloud because what we understand the our product offering is a very competitive and not only in Russia, but also on international.
And the international kind of stuff.
And so at the same time going to the the places which are already quite crowded. So for example, a ride hailing and kind of well developed markets like U S or UK et cetera, et cetera is obviously going to be blood vessels, and we don't necessarily have a competitive edge and so we're going to be very smart.
When we look at the.
Kind.
Total expansion opportunities and see wherever you have kind of in built advantage and tried to exploit it to the a to the forest.
Alright. Thank you, yes, maybe on the drug.
Okay.
Now quickly I think I wanted to add to your question about sort of the structural profitability of ride hailing so.
You know drawing on some of the earlier comments from me and on the.
The rest of our team I.
Think we are if not the most efficient and 1 of the most efficient structurally a ride hailing operators globally.
And you know, we examine ourselves against our public peers.
I think a.
The insurers.
And again, our plan is to continue to grow but also to improve EBITDA profitability each year for the next several years versus per years levels and this year, we plan to improve profitability EBITDA profitability versus 2020.
And again, we will Erie.
A reinvest a portion.
Our future growth, but.
That forecast of a improvement of profitability accounts, where that reinvestment again, barring any a seismic events such as a.
Covid quarantines or very significant competitive landscape changes, where we will.
This aggressively defend our market leadership.
Okay.
Okay. Thank you very much.
This concludes today's question and answer session. So I'd like to hand back to our speakers now.
And for any additional or closing remarks.
Yes.
Again, thank you very much for your questions and.
The more questions. Please reach out to the IR team will be able to help you. Thank you and have a good day.
Ladies and gentlemen, this does conclude the conference for today. Thank you for participating you.
And now disconnect.
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