Deliveroo plc (ROO) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Deliveroo Q4 2023 Trading Update Call. My name is Andre, and I will be the operator for the call this morning. [Operator Instructions] I will now hand you over to Will Shu, Founder and CEO; and Scilla Grimble, Chief Financial Officer.

Thanks, Andre. I appreciate it. So good morning. Welcome to our Q4 '23 trading update. I'm Will Shu. I'm the Founder and CEO of Deliveroo, and I'm joined by Scilla Grimble, our CFO. I just want to start by saying I'm really proud of our delivery in the fourth quarter. We made ongoing improvements in the CVP, including the launch of retail. We talked about some of the stuff at the CME. But I guess on the key takeaways, I'm going to go into them and then Scilla and I will jump into questions. So we closed out a successful year with '23 adjusted EBITDA expected to slightly exceed our guidance range of GBP 60 million to GBP 80 million. GTV growth of 3% in constant currency is in line with our guidance of lower single-digit percentage growth. If we look at the fourth quarter specifically, group GTV growth was 4%, and our order growth improved through the year, returning to a flat year-on-year in Q4. Within the mix, UKI grew 7% year-on-year in Q4 which is a slight drop compared to Q3. And I want to talk to you about one of the reasons behind this. Let's talk about the fact that we think long term at Deliveroo and our new commercial architecture, which we chatted about at CME in November is no exception. Our new commercial architecture [Technical Difficulty] those of our partners, our riders and our consumers. It works to reduce price markups and drives improved operational performance, all of which we talked about is fundamental to building consumer trust and growth. So we're pleased to offer our partners lower commissions linked to performance on these trust building metrics. The vast majority of our partners appreciate the aligned interest in our commercial architecture and are embracing it. But as we said at the CME, it can take some time for people to adjust to change. Unfortunately, 1 or 2 partners didn't want to sign up yet, and as a consequence, they're not available on the platform. But we manage this business for the long term, and we are convinced that this is the right approach for merchants, riders, consumers and for us. Now let's talk about international. GTV returned to growth of 1% in constant currency with improving trends in most markets. I'm particularly pleased with our strength in both Italy and the UAE, which continued into the fourth quarter. France does continue to weigh on overall growth and year-on-year growth there was similar in Q4 as it was in Q3. Our group revenue growth of 1% in constant currency lagged GTV growth. This was due to a mix shift in marketing spend towards marketing activity that reinforces price perception, such as promotions, and this is recognized as contra revenue. We also made some targeted investments in the CVP that impact consumer fees. As we said at the interims, given the consumer backdrop and given early signs of consumer stabilization, in H2, we felt like this was the right time to lean into this type of CVP investment in order to strengthen foundations for future growth. We have the confidence to do that because of the progress we've made already on delivery costs, but also reducing our marketing and overhead costs during '23. And this is evidenced by the fact that although we made these investments, we expect adjusted EBITDA to come in slightly ahead of our guidance range. And a really big highlight in Q4 was the launch of our retail offering. We're still at an early stage with that, but I'm really excited about what's to come, and we'll update you in March on that in our full year results. So I know everyone is going to be really interested in what we're expecting in '24. But just as a reminder, we'll be giving guidance on full year '24 on March 14. So with that, let's open up the questions for me and Scilla.

[Operator Instructions] Your first telephone question today comes from the line of Andrew Gwynn with BNP Paribas Exane.

Yes, I'll just limit to one. So you've obviously mentioned stabilization in the consumer. I suppose in the data, we can't really fully see that yet, but obviously mindful of these subtle changes in supplies. So maybe just pick up on that, any sort of anecdotes, any sort of shift in mix, which gives you a little bit more confidence that the consumer is back ordering food?

Andrew, thanks for that. Really, I suppose, nothing in particular to call out over and above what we shared in November because it was no surprise, it was 6 weeks ago since we spoke about it. So as a reminder what we said, and Will touched on it just now with some stabilization in trends in terms of both the retention or churn. And if you like the bottoming out of some of that and also some signs of stabilization in terms of frequency, I appreciate it's difficult to see it in the reported numbers, particularly because of the kind of Q4 to Q3, typical seasonality, but we're kind of beginning to see some of those signs, as we said at the CME, and that's what's giving us some of the confidence to invest behind the CVP again, as Will said. So no further color at this stage, but we'll update you in March.

Okay. That's it. And just on the mix shift, is there anything at all you could say there? Any sort of evidence of people trading up a touch or again, sort of no comment?

Nothing really to kind of add on that. I mean you -- again, you see it in the reported numbers. But clearly, in terms of the aggregate GTV composition, you're seeing some improvement in terms of the ATV mix. But at a basket level, nothing to call out at the moment in terms of mix shift.

The next question comes from the line of Will Woods with Bernstein.

Two, just on the different countries. How are you feeling about Meituan's pressure in Hong Kong? And then are we seeing any improvement in France? And would you say that the comments on stabilization of customer behavior also applied to that market?

Thank you, Will. Will here. I'll start with Hong Kong. So just to give people a bit of a reminder of what the market dyamincs were like in Hong Kong, up until '22, this was the 3-player market. Uber left in '22, leaving us in foodpanda and then Meituan came in. Our strategy in Hong Kong from the beginning was always focused on a slightly more affluent consumer base, working with a higher mix of independent restaurants. And I think you see that in our data where we have very high frequency and we believe higher basket sizes than competitors. I think the team has done a great job in terms of in terms of competing with Meituan as they've come in. And we think our business has been really resilient because we are positioned slightly more towards the higher end of the market. And I think that -- look, we have a lot of respect for Meituan as a competitor. We're still learning about their strategies as we compete with them day to day. But we're very confident in our position there. And I think the team has done a really great job. In terms of, I think, France, I think the weakness that we're seeing in France has been market-wide. We think this is something that others are experiencing as well. We have very good market share data there. So I think we have a very good sense of what's going on. I think -- we think that the market itself is a bit more stable in the third and fourth quarter, but it's certainly not in a position where we think the rebound for the consumer has happened yet, but it's certainly stabilized. And I don't know, Scilla, if you want to add anything about France at all?

I mean not really. I mean just Q4, Q3 reasonably similar in terms of kind of aggregate performance in France. A bit of noise just in Q4 because of World Cup in France last year. And then in terms of -- sorry, World Cup with France kind of making good progress also within the World Cup, but also some strikes in kind of later on in Q4 this year as well, just creating a bit of noise.

The next question comes from the line of Monique Pollard with Citi.

A couple of questions from me, if I could. The first is just wanted to understand in a typical year, whether there should be any material seasonal differences between 4Q and then 1Q. Just interested because it feels like we could be a point of inflection to customer growth and back to order growth from 1Q if there's no sort of seasonal difference between the 2 quarters? And then secondly, could you just comment without giving, obviously, any kind of forward-looking guidance, which makes sense. But ATV growth, obviously starting to cool a little bit as inflation starts to cool, the take rate reductions coming through as you annualize the measures you're putting in this year on consumer fees and commission rates. I'm just trying to understand, though, the drop through on some of these measures versus obviously, big ongoing efficiency improvements you make to the network and the potential that there's some marketing spend rationalization as things move from -- things that are marketing spend to contribute to revenues.

So maybe I'll start a bit with, I think, implicitly what you're saying is how should you judge '24 off the back of what you're seeing in Q4, both in terms of kind of consumer trends, the mix of GTV and the kind of mix of EBITDA. And then there's another question on how should we be thinking about the seasonal trend between Q4 and Q1. Is that a kind of right characterization of the 2 bits of the question?

Yes.

I think so if I can just jump in on the second one real quick and then we can go back to the first. I think one of your questions, Monique, is really around, okay, if you're seeing sort of less of an inflationary trend, what is that sort of impact on unit economics, I think, right? And I think in terms of our rider efficiencies, I think at the CME, you guys actually got a really good chance to talk to our team in depth about how we reduce rider wait time, how we improve customer handover. I think there was also a section on just how we do things algorithmically to better predict prep time and all of that so we're going to continue to go after that. We've also talked about multi merchant stacking as well. So there's a ton of those initiatives that are in play, some of which are pretty early, but you guys got a chance to go order the food. So that's going to keep happening. I think in terms of ATV, I don't think we're going to see any deflationary activity over the course of '23. I think inflation will decrease, but it's still going to be happening. Now I think that's a very good thing, because at the end of the day, if wage inflation is at parity with food inflation or maybe food inflation is a little bit less, that's just going to create a much more demand, in my view, because I think the biggest issue that we've seen in our markets in Europe as wage inflation has outpaced -- sorry, as food inflation has outpaced wage inflation, in some cases, 3x, 2.5x, that just puts the consumer in a really different environment. So if food inflation sort of decreases a bit, to me, that's a really big benefit.

Then in terms of the sort of shape Q4 into Q1, I mean, I think it's fair to say that it's quite difficult to call kind of normal seasonality for a number of reasons as the kind of different things that have happened over the last few years in terms of the shocks, but also pre-'19, obviously, we were in -- we were growing very fast in the industry. But in general, we don't see big seasonality between kind of Q4 and Q1. So that would be what I'd say on the shape. And then just building a little bit further on what we said in terms of shape into '24, really, the point I would talk to you without giving any kind of guidance is just reminding you about what we said at the CME in terms of the levers that we have available to drive GTV growth more towards our medium-term guidance. And as a reminder, what we talked about there were the new verticals and use cases, everything that we're looking to do to improve CVP, but also reduce macro headwinds. And obviously, we remain very confident about our CVP movements and the investments into new verticals and new phases. But we can't control the macro, and I think it drives us in to call assets and our right recovery at this stage.

Just the final thing, which is the mix that we should expect between the marketing spend and the more sort of reducing consumer fees promotional activity. So is there -- it seems like in the fourth quarter, especially given that you beat on EBITDA despite the take rate coming down, but there's just been more of a mix shift from just traditional marketing spend into comp to revenues.

Yes. So in terms of the move on revenue take rate, if you like, kind of Q-on-Q really, I guess, 2 things to call out there. One was what you're touching on Monique, in terms of our desire to kind of relook at how we're spending our aggregate marketing spend. So to be clear, kind of no increase in aggregate above what we were planning, but we shifted away from kind of brand type marketing and more into mechanics that help reinforce price perception. And those are sort of more promotional in nature and therefore, comp to revenue. That is part of where we think we want to invest behind the CVP. So see that as a sort of strategic investment rather than a kind of in-quarter tactical response. So that's one element of that take rate. And then the second piece, again, was in line with what we've been talking about coming through from interims through the CME in terms of our desire to invest behind things in the CVP and in particular, into prime, which is an offset, obviously, against fees -- sorry, into Plus, which is an offset against fees. Two things really there to call out that we did in Q4, one of those was the push into cost penetration into student in particular, in the UKI and the other was some further push behind the prime partnership in the UAE. All of those things I would describe as strategic, and therefore, you can make an assumption about what that means for '24. Spanning that more broadly on take rates, I think we've given guidance previously in terms of the mix impacts by vertical. And also, don't forget the kind of ad revenue benefit over time.

The next question comes from the line of Luke Holbrook with Morgan Stanley.

Just a couple for me. First is on maybe a market that doesn't get as much tension in the form of Kuwait. We have seen, I guess, a relatively new player in that market and that said partly they want to be larger than you by the end of this year. I'd just be interested to hear some trends from that market? And then secondly, on the UKI, just if you can spit out some of the grocery trends versus the core restaurant delivery business, that would be just quite helpful in Q4.

Luke, Will here. I'll take the Kuwait question and then Scilla, maybe you can talk about some of the grocery trends. Kuwait, relative to other markets is still relatively new for us. We think we're executing really well. We've got a team that built that business in the UAE. So it's the same team that's operating in Qatar, Kuwait and the UAE. We've had a lot of pre-existing restaurant relationships as a result of our very successful business in the UAE. So we're just continuing to execute on there. I think Kuwait is one of those markets that is going to be appealing to a lot of different players, I think due to just the culture of food delivery. And I would say the rider costs, which are typically lower than what we see in other markets. So no surprise that we see competition there, but nothing really to call out at this stage that's really different in our minds. Scilla, do you want to take the grocery one?

Yes. And again, nothing in particular to call out on grocery above what we've shared, both at the sort of teaching session on grocery earlier on in the year and some of the flavors that you've got from the CME, Luke. So pleased with what we're continuing to deliver there in terms of both efficiency, but also what we're able to deliver in terms of the CVP and the levers that we've discussed before that.

Okay. That's very clear. And just a follow-up just on the competitive dynamics that you're seeing, like in the UAE, you mentioned Plus being a big part. Are you seeing subscription almost as a defensive measure when you start to see markets that are structurally quite strong have increased competition?

You're asking about our sort of philosophy on Plus? We were -- we launched Plus in 2017. So it's not something that's a very new initiative for us. I think we are iterating on the different benefits that we can offer consumers, but it's a key part of our strategy. I don't think I'd consider it offensive or defensive. I think it really is just part of the consumer value proposition that is really, really important. We've got a very, very long-term view on Plus. And we shared the numbers at the CME, I don't have them off the top of my head right now. But clearly, big differences in retention and frequency and we're going to continue to invest behind that.

The next question comes from the line of Andrew Ross with Barclays.

I want to just come back to the U.K. and Ireland and to pick up on some of your opening remarks well on the couple of restaurants that have come off the platform as you transition your commercial architecture. Are we now done in [indiscernible] or should we expect that maybe some more -- put your thoughts you could drop off then '24? And I guess, as an extension to that, how are you guys thinking about the UKI market share extending into this year? I mean you can't control macro or end market demand, but you do have more influence in terms of driving the share. So how are you thinking about that as we go through this year?

Yes. Thanks, Andrew. So maybe just worthwhile for you to just chat a brief second on what the commercial architecture is. So at the CME, we talked about how trust is the key to driving growth for us and our partners. And our new commercial architecture is here to drive trust. Now what does trust mean? To us, it's really 2 things. It's high-quality operations and also price integrity. So that really is sort of lower markups and better operational performance, such as wait time at restaurants, missing items, better packaging, things like that. This drives wins for riders because they can do more orders per hour. This drives more wins for merchants. They have better retention on the platform and more frequency. It drives wins for customers, both in forms of lower prices and better delivery outcomes. It obviously drives benefits for us in terms of more trust in the platform. I would say overwhelmingly, both large and small partners have embraced this approach. They see the upside for them in the long term, obviously, we see the upside for us. And the key point on this implementation of the commercial architecture is it's actually having an impact on partner behavior and outcomes for riders and consumers right now. So what we've seen, for instance, is certain large partners, they've been investing a bit into having a managerial role overseeing delivery purely, improving the technology so that they know that they're getting a direct payback on these investments, right? So we're working with them on that. And we are seeing service improvements in the short time that we've launched this. So we are seeing reduced rider wait times at these restaurants because they are financially incentivized to do that. So we are 100% convinced this is the right path for the long-term health of our business and for our partners. I don't have any doubt about that. In terms of your question, sort of what do we see, I can just say that the overwhelming majority of partners seem to buy into this and we're more early. And for partners that don't agree, we will engage with them and talk to them about the benefits of the program, and we're going to keep doing that. The second question, sorry, Andrew, I didn't write it down.

It was just an extension of the first kind of talk about the UK&I market share dynamics and how you're thinking about that, I guess, through the back end of '23 and how we should think about it into '24?

Just -- okay. So how are you thinking -- I don't know, Scilla, maybe you can...

I mean I think it's sort of difficult to kind of give you a sense of what peers are going to do clearly in '24, but I suppose kind of standing back if we look at what we've been able to do in terms of GTV share, this year, we're kind of pleased with where we've ended up in the UK&I, and that's kind of notwithstanding some of the investments that we've been making effectively into price perception and other things in terms of GTV. So confident about kind of where we finished the year.

I would say Scilla, in addition to that, I mean, I'm pleased with our market share performance because we've also increased profitability significantly throughout the year, right? And so if we look at those trends, we're happy with them. I think it's -- the team did a great job in terms of the competitive environment.

The next question comes from the line of Joe Barnet-Lamb with UBS.

Yes, 2 sort of related ones, I guess, build off Andrew's U.K. focus. Firstly, I mean, are you able to quantify the headwind from KFC? I guess that's slightly difficult to do. But then sort of related to that, I guess, you specifically said your marketing -- sort of shift in marketing wasn't a direct response to the loss of KFC, but it presumably allowed you to target some of your former KFC customers. So is it a fair assertion to say that, that shift allows you to soften any impact you would have seen from KFC? I guess, generally, so a little bit more color on the impact of the loss of KFC during the period or should we be thinking of this as something that was quite material in the quarter or something that you were able to mitigate?

So thanks, Joe. I mean I'm not going to comment on any specifics in terms of any individual partners. I think we've given some kind of clear color in relation to the GTV slightly lower growth Q-on-Q in the UKI. And as we kind of called out some of that is off the back of those commercial architecture changes, which now seem of a reasonable length, but, also for completeness, there was some noise in the comp in relation to both kind of World Cup, but also the kind of McDonald's rollout kind of last year. And so we're kind of now through that and hence, a bit of kind of comp headwind. So I'm not going to kick any further than that, the kind of GTV shape. In terms of that kind of shift in marketing. It was -- part of what we were looking to do really from -- as we've gone through 3.5, so you'll remember, it's at the interims, I was calling out, beginning to see some signs of inflection in or stabilization rather in customer behavior. And therefore, we were looking to invest behind the CVP. And we've done that across a number of different areas as you know both. I think you noted this. We explained to the CME whether or not that was -- how we've looked at service, how we've looked at Plus penetration, how we've looked at radii expansion and then also how we've looked at kind of marketing and promo. And in the mix shift -- I mean, yes, we look to target as much as possible in terms of any of our kind of promo that we run. But really, what we've been looking to move through in the quarter is more things that sort of reinforce some of that kind of price perception, like the 7 of 7 campaigns and those sorts of things rather than it being a kind of response to anything in terms of selection.

The next question comes from the line of Giles Thorne with Jefferies.

My first question is for Will, and I guess, it's a prelude to 14th of March when you'll give us the details, but it would be useful, Will to hear your latest thinking on how you think you can bring your better free cash flow profile and better balance sheet to bear on competition or growth in 2024. A very broad question, but you obviously sit in a very privileged position there. So your latest thinking on how you bring that to bear? And then the second one was much more specific. I wanted to pick up on the changes you're making to Plus in the U.K. I think it's minimum basket sizes are coming down from GBP 25 for certain restaurants, but the service fee is going up. So some commentary as to the logic and what the likely impact on -- will any metric you get to talk about, but I guess gross margins would be useful.

Thanks, Giles. Nice to hear from you. As Scilla said -- well, as you said, we do feel like we're in a privileged position. This is true. We do have a lot of capital on the balance sheet. The free cash flow generation is moving in the right direction. But as Scilla also said, we're not here to give '24 guidance. I think we're quite happy with where we're at. But I think I'm afraid everyone is going to have to wait until the 14th of March before we go into more specifics on that. And then in terms of Plus changes, Scilla, do you want to...

Yes. I mean, again, as we touched on at the CME job, we're looking to further move order penetration of Plus across several years, there will be various -- I mean it's a kind of living, breathing program. And so we will look to make changes to different aspects of Plus as we move through, I think, Will then touched on November. So yes, you're right on that kind of silver piece in the UKI. There is a shift that you described. We look to see the kind of evolution of that, but I'm not calling out anything particularly off the back of that in terms of the overall group structure.

And just as a follow-up on that, are you happy to say that this is more of a pro growth than a pro margin move within Plus?

I think in -- I mean I'll go back to what we talked about in November. And when we look at it, we look at these things in terms of the longer term and effectively, the I mean the free cash flow that's generated from it rather than it being a kind of margin rate piece. And therefore, we are just going to refer you back to what we said in November that we're confident that the economics of Plus makes sense.

The next question comes from the line of Chris Johnen with HSBC.

I just got 1 question, a high level one, referring to '24, but maybe given it's not -- I'm not asking for anything quantified, you should -- could still share your views. I'm just curious in terms of what you expect could change this year if anything, with respect to competition. I think the expectation on the sell side is that most of the global companies are going to see quite a bit of an extension in profitability in '24 versus '23. And there are some concerns that some of the bigger players have a little bit more, how I should say, like push around money maybe that could stabilize competition. So I'm just curious at something you expect as well? Yes, I'll take any comments.

Thanks for that. I think the first thing I'd say is we have a very strong balance sheet, our business on that free cash flow generation momentum is really good. So certainly, we feel good about our ability to invest, if necessary. I think your question is a very high level one and it's actually a bit difficult to generalize because you have competitive tensions that are different country by country, even city by city. You also heard Scilla talk, I think, about how we are seeing this consumer stabilization, and this is giving us encouragement to invest behind that -- the CVP in a measured way. We didn't necessarily surprise me see competitors do similar things in those markets where they're seeing that. But I guess at the end of the day, I've been doing this 11 years, the business has always been competitive. and we respect our competitors in all of these different markets. And so I wouldn't say there's much new that I can add to that and what we're kind of seeing today. And Scilla, I don't know if you have anything else on that. No?

The next question comes from the line of Kiranjot Grewal with Bank of America.

Just got 2 questions from my side. Firstly, your AOVs have been coming down to a much more reasonable levels throughout last year. Are you able to distinguish how much of the step down has been driven by broader stabilization of prices versus the new commercial architecture, which is reducing the markups on the platform? And the second one is around M&A. Of course, over the last year or so with the rates going up, M&A in the sector overall has slowed down. What's your view on 2024 and how we should see M&A develop in the broader sector?

So I'll take the second one and you take the first one. In terms of M&A, I'd say this, we're not a very M&A-driven company. Everything we've built has been organic. So we occasionally see things across our screens that are interesting. If we find those to be interesting, we'll engage with them. But by and large, it's not something that we spend a lot of time thinking about. I guess the other thing is, and we talked about this at the CME, this is the most exciting I've been for the business since we started it, both in terms of our momentum, in terms of the initiatives we're launching, and most importantly, the team around me. So we feel great about where we're at, but M&A is not something that we really, I think, spend a lot of time chatting about it around this table, at least. Scilla?

And then just in terms of that shape of GTV per order, so what we've seen at a group level is that move from sort of 24.2% in Q1 to 24.7% in Q4. But you're right, that kind of increase year-on-year is reducing. It's difficult to disaggregate the mix in the way that you're describing. I think the majority of that reduction in growth year-on-year, though is off the back of lower food inflation than anything else.

Which is a good thing in our mind, right? Because that ultimately, I think, was the biggest impediment to growth in these European markets when food inflation outpace wage inflation, 3x, right? Is that -- for that to come down as a very good thing.

Next question comes from the line of Roman Reshetnev with Goldman Sachs.

Two questions, please. First, given the investments into CVP, why are we not yet seeing order picking up faster? And when do you expect to see the payback on investments? And second, on the international markets, could you please elaborate on the market that are outperforming versus underperforming? And would you consider putting some of the smaller markets under strategic review?

Thanks for the questions. Firstly, in terms of international, I think we've called out in the statement, those where we've seen particular strength are in Italy and the UAE. So the kind of improvement Q-on-Q otherwise is sort of broadly based, so most markets have approved Q-on-Q. But again, we called out, we've seen in France in particular, that, that was relatively similar performance in Q4 and Q3. So that's probably the kind of color on international that are going to this stage. In terms of the -- why are we seeing a more rapid improvement in orders off the back of some of the investments in CVP. Again, I think we've been, I hope, consistent in how we've explained this, that we see very much as kind of the investments into the CVP as being something which is right for our brand and the consumer trust over the medium term. And again, to kind of go back a bit to one of the answers I gave a bit earlier, we're seeing that investment across a number of different things. It's how we've thought about service more broadly. It's how we've talked about -- how we think about radii, it's how we think about kind of pricing within the mix is all of those aspects. And I think you'd expect that those are not kind of immediate sugar rush, if you like, returns in terms of volumes, you see that play through over the slightly longer term. Someone did ask me the question this morning, just a similar question specifically on some of the promo mechanics. And again, I'd sort of point to the kind of mechanics that we're running typically is this which kind of reaffirm and price perception. So think of them as to things like the 7 of 7s and so on that we've been running across a number of markets.

The last question for today comes from the line of Sean Kealy with Panmure Gordon.

Just one for me on the efficiencies in the shift in marketing mix. So remember at the CME, we talked briefly about the improvement in user level targeting and what impact that could have. Is this shift from brand to promo marketing? Does that imply that you're expecting a significant increase in the marketing efficiency from that new algorithm? Anything you can sort of talk about on that would be appreciated.

It's not actually -- you shouldn't link the 2 in that way. So when we were talking about kind of user level targeting, that was more about the opportunities that we saw for marketing efficiency kind of going forward. In '24 -- sorry, in '23 Q4, when we're talking about that mix shift, that's more between kind of core, if you like, brand marketing and more promotional type activity along the lines of the 7 of 7 that I've just discussed. So it's the mechanic shift this cause a move in Q4.

I think it's fair to say that as we talked about at the CME, we are getting better at that user level targeting. And I think if we think about the future once you're better at that, driving that price perception in a more targeted way is going to be something I think we have the ability to do, right?

So that's a...

Yes, but it's not related to actions in the fourth quarter, right? That's an ongoing process, I would say.

So you are saying, does that imply that maybe that shift would extend a little bit going forward?

The shift in terms of the mechanic shift? I mean I think we'll continue to -- yes, we would always continue to look at kind of optimizing marketing mix in response of kind of what we're seeing, what the consumer outlook is and so on. I mean, that would just be something that we need to keep live on an ongoing basis.

This concludes our question-and-answer session. I would now like to turn the conference back over to Will Shu for any closing remarks.

Thank you, Andre. I just want to thank everyone for their interest today and for joining us. Look forward to talking to everyone on the 14th of March. We're going to talk about '23 results then. Thanks.

Ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect. Goodbye.