Jumia Technologies AG Q1 2023 Earnings Call
[music].
Good morning, ladies and gentlemen, thank you for standing by welcome to Jimmy as results Conference call for the first quarter of 2023 at this time all participants are in a listen only mode.
After management's prepared remarks, there will be a question and answer session I would now like to turn the call over to SASSA to mirror head of Investor Relations for Julia. Please go ahead.
Thank you.
Good morning, everyone. Thank you for joining us today for our first Codeshare 2023 earnings call with US today are false did you say, you, obviously linear and I'll try and maybe amazing executive Vice President Finance and operations, who will start by covering the safe harbor, but we'd like to remind.
You did our discussions today will include forward looking statements actual results may differ materially from those indicated in the forward looking statements. Moreover, these forward looking statements may speak only to our expectations as of today, we undertake no obligation to publicly update or.
Revise these statements for a discussion of some of the risk factors that could cause actual results to differ from the forward looking statements expressed today. Please see the risk factors section of our annual reports on form 20-F as foundation on May 16, 2023.
As well as our other submissions with the SEC.
In addition on this call, but we'd refer to certain financial measures not reported in accordance with I F rates you can find reconciliations of these non <unk> financial measures to the corresponding <unk> financial measures.
Earnings press release, which is available on our Investor relations website with that I'll hand over to Francis.
Thank you.
Welcome everyone and thanks for joining us today.
Sure.
But we are now seven months into the execution of our strategy to accelerate our progress towards profitability.
And I'm very pleased to report today very good progress towards this goal.
In Q1, 'twenty three adjusted EBITDA loss decreased by 51% year over year, reaching its lowest level in over four years.
This is the third consecutive quarter of adjusted EBITDA loss reduction on a year over year basis.
And we are accelerating the pace of flows prediction.
It's both some decrease just to be there in Q4 22.
The last prediction this quarter was supported by significant cost savings as we reduced operating expenses by 32, 9% year over year.
Opening the books every cost line in the P&L and driving efficiencies, while maintaining youll standards of operation and execution.
We are very pleased with the progress made so far on costs and we believe that we still have room to drive further savings on fulfillment like G&A costs.
Our efficiency measures continue to yield more results.
I also want to be very clear that although we believe Gulf prediction to be an essential liver for breakeven.
One aspect of our broader profitability strategy.
The other very important lever for breakeven is obviously growth.
The order growth in Q1 'twenty three so he was affected by a number of headwinds.
We have significant girlfriend away you know markets and we're working on the fundamentals of our business and consumer value proposition to capture the vast opportunities.
Let's now review the details of <unk> performance in Q1 <unk>.
So <unk> consumers the oldest engineering fees declined by 22, 26, and 22% year over year, respectively.
Usage dynamics were negatively affected by recommendation effect dosing of <unk>.
First of all the macro environment remains very challenging.
High inflation is affecting consumer spending power and restricting our ability to source goods.
We also faced a challenging operating environment in Q1, and that Georgia with protests related to due to the withdrawal.
Of high denomination currency notes there were also security concerns around the delay shouldn't build in that February 23.
As of today, the disruptions in Nigeria have subsided.
Hey, Ken.
We took very deliberate actions.
We knew would affect usage in the short term, but at the right things to do for the long term growth and profitability of our business.
We recalibrated, our product and service portfolio moving away from unprofitable categories with limited consumer lifetime value.
As part of that we have ceased all first party grocery offering good wolfcamp truths.
And significantly reduced promotional intensity behind the number of services on the <unk> App.
In fact, Jim yet the absolutes is accounted for over 25% of generally declining.
Over 40% of all does decline.
Jim Yes, absolutely. This is combined with Mcg category, which includes grocery products.
Accounted for a total of 55% of the decline in items sold during the quarter.
Lastly for Jim this specific space.
<unk> was a significant headwinds and contribute to <unk>.
<unk>, sorry, 15 percentage points to 22% decrease in Q1 'twenty three.
Nine out of 10 local currency depreciated depreciated against the U S do it all.
In the gypsum found them Guinean City for example, depreciated by more than 80% against the dollar.
What is the <unk> incident, and South African Rand depreciated by over 10%.
We view these headwinds as temporary.
And we're working on a comprehensive plan to drive long term profitable growth.
The focus of this plan is on getting the basics rates.
All geographies.
The first priority is to improve supply and the assortments really Vince, but attracting high quality centers onto the platform.
And I mean, that's what we live in brands strong local distributors unimportance with a focus on the core e-commerce categories, such as food and the home appliances fashion and beauty.
We have already taken steps to streamline our category mix with a pullback from first party grocery.
So we can now focus on getting the right assortment and price points across really Vince product categories.
We're also working on enhancing set of management tools and processes to improve the experience of all citizens from yes.
We have thoughts is rolling out the new version of full citizens sort of sensor platform.
Which includes a broad suite of pseudo management tools to help them better manage and grow their businesses I'm Julia.
That's been at least we plan to further develop generic global this is both a platform that totals overseas centers most of China's two southern Julia.
Jimmy a global as a meaningful competitive advantage for Jim Yeah, I did it allows us to offer consumer products that are not available locally at the attractive price points and within a reasonable timeframe.
In addition to our commercial efforts.
We are working on Day-trade single addressable markets more effectively.
And we intend to do so by tapping into the large consumer poorly located outside of primary switches, which are usually under served by retailer as we speak.
Well that's.
We are extending our logistics reach into these areas in a cost effective manner.
Most lease for developing ticket station networks, along relevant logistics routes.
And these speaker stations are usually operated by third party partners, who work under strict guidelines and supervision from Julia.
The second requirement to expand our reach is to adapt our marketing strategy.
And this means leveraging relevant local channels to reach these populations educate them about the ecommerce and engage with them on an ongoing basis.
Ivory Coast is one of the countries that's at the forefront of developing e-commerce in secondary cities and rural areas.
There are a number of learnings we can leverage to replicate the success in all the countries.
In terms of marketing.
We have found that local channels, such as local radio suite activation junior false.
More effective at driving awareness and conversion rates.
To be called digital marketing channels.
That's why we're very very comfortable working with much smaller marketing budgets.
It is not a question of spending large amounts of marketing. It's a question of deeply embedding ourselves with the local communities to understand what's resonating best with them.
On the technology fronts.
We are focusing on our development efforts on products and features that enhance the UX to make our platform, even easier and more intuitive to use.
Unless but at least Jimmy a b has an important role to play in the growth of e-commerce to add more convenience and remove friction that check out well.
We are now in the process of rolling out pay undelivered to allow digital payments on delivery and further reduce the use of cash.
None of these actions are quick fixes.
Oh shortcuts to growth dissolve fundamental improvements of our customer value proposition. So we expect the results to materialize overtime.
Now moving onto <unk>.
<unk> was $48 6 million daus done such a 1% year over year and down 13% on a constant currency basis.
At 56 were a significant headwind again strategic performance, particularly the 87% depreciation of the Egyptian pound against the U S dollar.
This was a result of our decision to discontinue highly promotional services and depth that.
That do not build sustainable cohorts, such as airtime recharge and that's just.
These developments can also led to a decline in PV penetration from 28% in Q1, 22% to 25% in Q1 'twenty three.
Despite an increase in TPG penetration in both our physical goods and food delivery platforms.
Jimmy I pay transactions.
Reached 2 million daus in QM trade Street.
<unk>, 38% year over year.
The transactions decline under dramatically up accounted for over 80% of Java or dreamed up eight transactions decline.
29% of orders placed on the platform on the Jupiter platform in 'twenty in Q1, 'twenty suite, we're completing using Jimmy IP.
Compared to 34% in Q1 'twenty two.
Here again the decline in beef pension was mostly attributable to the redemption of genetic the app services into transactions mix.
With junior pay transactions being efficient as percentage of older actually increasing in both physical goods and food delivery platforms.
Okay.
As I mentioned earlier <unk> continues to be a strategic priority for junior and we're working on making it even more effective enabler for E Commerce business.
The initial rollout of Jimmy on delivering Guinyard, showing very good traction.
'twenty, three which was the first full month of Rollouts, 20% of postpaid oldest from Kenya were computed using zoom IP.
Also we remain focused on extending our payments processing activities of platform in Nigeria, and Egypt well.
We have previously obtained the relevant licensees to do so.
I will now hand over to Allen, who will walk you through our financials.
Thanks, Frances Hello, everyone.
Thank you Joe for the review of fault topline performance on page 10.
Revenue reached $46 3 million USD in Q1 'twenty three.
<unk>, 3% year on year, and 24% on a constant currency basis.
Marketplace revenue growth, which was 4% and 21% when it goes down currency basis was offset by through its body revenue decline.
This was mainly a result of the scaling back of the glossary subcategory, which was largely undertaking.
First party basis.
Although revenue was down.
The 8% year on year, mostly due to the suspension of all logistics at the salvage offering in most markets.
Except Nigeria, more coal and iron coast.
We took this decision in Q3 last year to reuse business complexity in the low countries to amend their logistics capacity and efficiency before taking on third party volumes.
It's now unpack the growth dynamics of our marketplace revenue.
Marketplace revenue reached 27 point for me is any way to do that.
4% on a year on year basis, and 21% on a constant currency basis.
He's a robust proof of months considering G. M D was down 22% and 6% on a constant currency basis over the same period.
Market data revenue growth was supported by strong commissions revenue momentum, which was a 40% year on year and 61% on a constant currency basis.
This momentum was the result of the commission take rate increases we implemented in mid 2022.
Marketing and advertising revenue was stable year over year, and 32% on a constant currency basis.
This effect resulted in significant headwind to this revenue line due to the weight of the tips and Don and the marketing revenue mix and depreciation by 87% against the USD in Q1 'twenty three.
Yeah.
Value added services revenue, which mainly include logistics revenue for from theaters in three weeks and months with venue, which include fees from consumers decreased by 11% and 21% year on euro respectively.
It was mostly driven by the decline in volumes.
That being said, we are significantly improving the monetization of all logistics services.
Through a full fulfillment costs.
The ratio of the sum of fulfillment and value added services revenue older fulfillment expense increased from 62% in Q1 'twenty two.
Richard I of 17, 9% in Q1 'twenty three.
Let's now move on to gross profit, which was also resilient in Q1 'twenty three.
Reaching 28.6 million USD.
That 5% and 24% in constant currency basis.
Commission take rate increases drove a strong expense and gross profit margin.
Which went from 10.8% in Q1 'twenty two to 14, 4% in Q1 'twenty three.
Yeah.
Moving on to costs.
What do you think about expense reached 17 million USD down.
34% year on year, and 22% on a constant currency basis in parallel with the declining orders.
Fulfillment expense per order, excluding Jimmy up at orders, which do not include logistics cost decreased by 28% from 3.1 Dot all in Q1 22 down to 2.5 dollars in Q1 'twenty three.
As a percentage of G N V food cinnamon expense improved from nine 5%.
8.1%.
These efficiency improvements are early signs of success of the initiatives that we are working on across all logistics chain. These include optimizing our footprint and logistics routes, improving warehousing staff management and productivity reducing packaging.
And many more.
As we continue existing in these initiatives, we expect to drive further improvement in efficiency compared to current levels.
Sales and advertising expense reached $5 8 million anyway, you're down 69% year on year.
65% on a constant currency basis, as we continue to bring more discipline to our marketing investment.
This drove an improvement in marketing efficiency ratios with sales and advertising expense to order decreasing by 58% from $2 in Q1 22 down to 0.88 in Q1 'twenty three.
As a percentage of G E sales and advertising expense reached 2.9.
9% in Q1 'twenty three.
Which is more than a full point side, two seven points improvement yellen yeah.
We are comfortable working with much smaller marketing budgets and we don't believe growth has to come at the expense of marketing efficiency.
As mentioned by Halsey failure growth is primarily essential Oh, good August the value proposition is.
And E. There are any gaps in the basics no amount of marketing spend get effectively address that.
Why are we all focus today on inventing the consumer value proposition where needed to create a sustainable foundation for long term growth.
Moving on to technology and G&A cost.
Second content expense reached $11 8 million.
Down 9% year over year and down 1% on a constant currency basis take either called bother for D. N N. We remain committed to improving the experience of all users through the rollout of relevant products.
That being said that also their savings opportunities for us on the deck Gus France as we can.
New York, United Ingalls take infrastructure, while improving staff productivity.
G&A expense excluding share based compensation.
Reached 25 million USD, <unk>, 23, don't 16, yellen and 5% of the constant currency basis. The stuff goes component of G&A expense, excluding share based compensation expense decreased by 21% year on year as a result of the organizational changes undertaken in Q4 22.
Note that Q1 'twenty three figures.
Yet reflect the full impact of these Ed come gets.
Q1 still included the last month's salaries of some of the years.
Let's now look at the balance sheet on page 15.
Next in queue on 20 310.8 million.
We are returning to quarterly levels around 1 million Mark after the logistics and technology investments of last year.
Near Tianjin and working capital inflow impact of $7 1 million largely due to an improvement in the payable cycle, which had a positive cash effect of $6 2 million cash utilization for the quarter was $23 5 million.
The reduction of approximately 60% compared to both Q1 and Q4 to Institute.
At the end of March 22, we have the liquidity position of 205 point.
4 million comprised of $86 9 million of cash and cash equivalent of 180.6 million assumed it budgets and all those signed into law.
Or do.
Do you significantly reduce cash utilization allowed us to meaningfully expand our cash runway.
I know <unk> policies will walk you through all guidance on basis.
Thanks for the time.
Our Q1 'twenty three results show strong progress towards breakeven and further support the guidance we provided earlier this year.
As such we are reiterating this guidance and remain committed to further accelerating our progress towards breakeven.
For the full year 'twenty three we expect just you did the deal us to reach between 100 $220 million.
At the bottom of the guidance range. This means getting adjusted to be did us by more than half of 'twenty two.
In line with what was already achieved in Q1 'twenty three.
We expect sales and advertising expense to reach between $30 million to $40 million at.
At the bottom of the range.
We're talking about the reduction of 60% versus 22.
I will reiterate here that although we are cutting the overall amount of marketing expense. We are extremely focused on driving usage growth on the platform.
Our marketing spend although Laura.
It's much more efficient as we tap into more relevant channels for our consumers.
And in parallel we continue to work on multiple dimensions, how did your proposition to consumers and selection price and convenience.
Let's see.
We expect G&A, excluding share based compensation to reach between 90 and $105 million.
<unk> $218 million in 'twenty two.
And this is essentially a reflection of the head count cuts completed already in Q4 to Institute.
And does not incorporate the benefits of ongoing initiatives such as the office space with the rationalization.
We are encouraged by the progress made this quarter towards breakeven going forwards.
We maintain that cost discipline and drive further efficiencies right redoubling, our efforts on the girl funds to scale the business towards profitability.
With that we're ready to take your questions.
Thank you at this time, we will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue you May Press star.
Two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
And our first question. This morning is coming from Luke Holbrook from Morgan Stanley look.
Luke Your line is live please go ahead.
Yeah good afternoon.
A couple of questions from my side.
And it's about your bright commission rate quite significantly over the policy. It now if I exclude I guess cancellations you know G M B at Geismar.
Is that up to 19% I'm just wondering what the reaction has been from matching.
Over that time and do you think you'll reach their maximum selling the monetization effort you put into that and then the second one is you are down quite significantly year on year I. Just wanted if you could just talk a bit about the trends stay the cold that I didn't get into April and May I have to stay in light of your South mountain targeting 40 about 70% quarter on quarter. Thank you.
Yeah.
Sorry, I didn't get the last the second question Yeah.
You mentioned something was down on me.
Yeah, you'll access yeah your active base.
Down down about call it a year on year. So just wondering how that's how it trended through the call without getting your sales in that market.
All of the production.
Okay sure.
So let me start with the first question. So indeed, we increased our take rates that's from commissions and value added services last year quite significantly.
I think the reaction from centers was fine I mean of course it wasn't it.
<unk> for that but we administration with citizen understand that we bring value and we're creating a business for them.
We made sure that the new commissions when entering the business and understood that there were.
To pay the fair price for the value, that's where we are creating for them. So we had no backlash no bad reaction Labatt doesn't nothing nothing of that kind from the vendors.
The question about whether we've reached a maximum.
It's very hard to tell when you reached a maximum until you until you step it up.
The decision we've made to collectively it's at this stage is that we don't want to push further on the man, that's where we'd take rate.
Emissions, mostly.
Because a large part of our growth plan relies on improving the consumer value proposition, which mostly comes you know where markets were more consumers are cash constrained if I can put it this way, which mostly comes from improving the assortments are the price points you availability of goods and this depends on vendors. So we do.
Don't want to be pushing vendors to halt at this stage, because we absolutely need them to improve the value proposition of our platform and drive long term growth with low marketing cost.
Training them going further than where we are today, we believe it's a fantastic rate that brings value that creates value for both vendors and surgery and ER and for junior.
And and with such a signed was definitely one of them I think they shouldn't until I want to take the risk to to push it too far.
Then under usage trends for the quarter I think I mean, the trends, it's pretty similar for the whole quarter.
I would not say, it's correlated to marketing I think what's what's happened from this thoughts.
We had a number of decisions very deliberate actions that had an impact on usage on short term usage floods, we decided to pull back from first party grocery in many countries as we stopped a very high I mean pretty intense promotional activity. It was a dream.
For example, it has a direct short term impact on music.
That doesn't matter of rise through the whole Q1 quite evenly and it keeps on merchandising and in some ways the months after that.
So I would not comment on specific trends within the quarter.
What matters the most to me is that we.
Put together the right building blocks and work on fundamentals.
To get some.
Short term impact with something that was unfortunately part of the plan.
You would have to happen when you put it back heavy discounts Oh, you remove a category that's unprofitable.
But we also are very happy to see some improvement at country level.
Thanks to the work that we've delivered on commercial supply and <unk>.
Distribution and better penetration in all markets.
Got it and can you just describe it it's great.
Janvey or not that I see.
This would be grocery events.
So you can sort of.
Yeah, correct, yeah grocery and the G N V. Max D displays that are giving us significant.
No. We didn't we did not disclose its I can I mean, what we mentioned earlier on these that are in the gym in the gym did decrease that we saw this quarter, Jimmy I pay App and groceries accounted for 34% of the total decline that's one sort of the whole declining at a group level.
But grocery was definitely peanuts, the biggest category by by fall.
So Tony the most complex, but definitely not the biggest.
Got it.
Okay.
Thank you. Your next question is coming from Aaron Kessler from Raymond James.
Erin. Please proceed with your question.
Great. Thanks, maybe just a couple of questions first of all you mentioned kind of opportunities for additional expense cuts.
And kind of the P&L can you just give us a sense it doesn't seem like there's much room left at advertising should we assume that's kind of more G&A or just other areas that you can discuss that it sounds like the biggest impact to revenues on kind of a sequential basis whats product mix or makeup.
Great quarter.
Macro product mix and FX for us Thank you.
Okay. So correct me if I'm wrong, but on your first question on the opportunity for further savings across the cost base.
I think I mean, the good news in a way that we see more poultry and people savings right. I think we already we've already had quite some impact on costs.
But when do we keep look I mean, we keep on looking every day and week waking up every morning thinking about how we get to profitability.
If you look at the different items in the P&L.
Under fulfillment parts, we were just at the beginning of a very long process. So our cost per hour CPU Augusta, all doing from Memphis to coincide USD now excluding dramatically up.
But the measures that we started a couple of months ago I was just starting to impact.
You still have very diverse slivers of impact across countries and when all the countries will be aligned with best practices, we believe tends to get more savings.
And then on the marketing costs I think we've already done quite a lot. We confidence that this is a sustainable level given the actions that we started on building better value proposition and driving better penetration across the country.
And then on G&A.
We have been reducing costs, while also reducing complexity and streamlining the organization, reducing number of music lines I mean, simplifying the lives of everyone and we believe that we can still get more savings, especially because what you see in Q1 here does not reflect the full extent of what we've done.
Oh, that's off the salaries also feeding to us presenting she wanted to in Q1, P&L and we did not no longer being the P&L in Q2 of Q3. So are we yet to see the full impact of headcounts, and ER and mobile and broad broadly speaking of all G&A savings in that P&L.
And then we also believe that we have some gains to make them take them. So.
The tech teams and the product we are making some progress on our infrastructure and you'll still be just we can get more efficiency from kings.
So we really not at the end of the journey I mean, as I said already the cost is not 70 dimension of the planet.
But I want to make sure that we're not at the end of the journey and when it comes to making junior lien mortgage company.
And then Aaron So are you would you mind repeating the second question second question, just kind of on the relative magnitude of the impacts to that kind of growth or in Q1. The revenue maybe revenues in Q1 versus Q4, obviously declines just maybe the impact of macro product mix and FX, which you called out should we assume product mix is the biggest.
Pack and then kind of macro on that FX or just if you can rank those.
So I will answer Directionally, so product mix is changing slowly I mean product mixes by definition something that takes time to evolve. So from Q4 to Q1, you don't have radical changes.
To the point that it has an impact a visible impact on revenue.
Although we are gradually evolving.
Towards towards the top categories that we we were working on being fashion beauty TV home appliance affluence and electronics.
And then than the macro situations pretty much the same that we discussed three months ago ethics, I still helping us it's a significant headwind.
I would say no no major change on that front at this stage.
Great and just maybe finally anything you would call out in terms of geographic performance any major differences among your kind of main regions.
So.
We remain a bit directional so we will not we were not just clothing comps for data on an ongoing basis, but directionally speaking, we see that I mean macro is the main driver of our bats performance for the for the.
So the worst cases.
If I can put it this way.
We are seeing them, we're starting to see some bright spots in some countries, where the early actions of the turnaround plan all starting to pay off.
So for example, we're seeing.
Very strong resilience and good performance on top line and also one of the best performance of marketing efficiency.
Since then he got it are we seeing the brightest spots in Morroco, where top line is is improving after a couple of rough quarters.
And that's the main I mean, that's that's a few highlights and then there are the countries where when macro is the most deteriorated I'll just do the ones that are the first relates tricked anymore.
Great. Thank you, but overall I mean, the same level of execution and quality of execution and suddenly there was consistency injections that were running outs deliver more or less the same results.
Across countries provided you have the similar microenvironment.
Got it great. Thank you so much.
Thank you.
Your next question is coming from Catherine O'neill from Citi.
Kathryn. Please proceed with your question.
Yeah.
Great. Thank you.
I've got three questions if that's okay.
First one is can you give me a label that you mentioned in terms of bringing them onboard.
I just wondered if you could provide a bit more detail on that in terms of how meaningful you think that could be at the time in terms of broadening of completion and the impact of D. N V and whether they sell it to come on at the same take rate.
Faith in that.
And secondly, within SG&A I, just wondered how much sort of one off restructuring costs you would expect.
Sylvain and in the first quarter and then the final question is if.
If you're talking about that's more efficiencies come from fulfillment and tagged and savings.
Within SG&A.
Fully reflected in Q I, just wondered why you didn't maybe upgrade your adjusted EBITDA guidance.
I didn't do we expect it to do.
Oh, My God I'm quite challenging now.
That said as what prevented that.
Okay. So sorry, Catherine May I. Please ask you to repeat the.
Second question.
Yeah. The second question was just with.
Within SG&A or within your Opex I, just wondered how much.
And one off restructuring costs he.
In lung kidney to expect for this year, that's obviously like the peak and when we get into next year.
Okay. Okay.
So let me start with genetic rubles, so generic global I mean, it's I'll say, it's a it's a business line to us I guess what.
Well known to everyone in the call are all big platforms in the world and have that kind of.
Overseas ecommerce activity.
Hmm.
True measurable for US is a huge advantage as we discussed several times in previous calls.
We deeply believe that our markets are.
Constrained by supply rather than humans.
The daily Challenge of African consumer, it's about finding the right product at the right price in the markets, where there's just not enough supply you are fully distributed.
For us being able to access that tap directly the vast pool of Chinese suppliers, mostly Chinese.
It's a huge advantage. It means we can bring to our live in market products that are often not available or way too expensive or fully distributed.
Hum.
At the right price, because we would have to cut off like layers of intermediaries.
With very good service with some chicken quality, which will increase trust.
From the customers.
And and in the process seem to be creating a lot of value for both customers and vendors, we able to kept for sizable take rates. That's that's really enables us I mean that makes it a very valuable business for us to put it this way.
So it's a business that's I think even more relevant for us in emerging markets. In Africa, then it can be for all the players in other places in the world.
That is a financially strong and viable and that we aim to keep on developing we have countries with fairly high penetration rate of a premier global and we're trying to replicate I mean, we're not saying we're actually.
We're busy replicating the same good practices across across most of all they live in buckets.
Very strong asset for us and very important part of the plan.
Then.
Do you have a question on the one off restructuring costs. So we had we did not separate it didn't do them in the numbers that we're presenting here because it was not meaningful.
Maybe stuff that's when you want to comment on that.
No you're right it wasn't that material until we have notice of it what was more much Iot decided that we have kept in Q1 salaries those people who have left and it was decrease this does close in the coming quarters.
And Katherine to your last question. So indeed, we did not upgrade the guidance.
We would be happy to do it in the industry Troy if we if we confirm the good progress.
Hum.
New.
That's a study that can be a topic thoughtfully for the for the for the coming quarters.
And right now with two we're working within the guidance in this quarter.
And are we confident that we're going to see further improvements in cost.
Yeah.
Okay. Thank you.
Thank you.
Thank you we have reached the end of the question and answer session. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.
Thank you everyone.