Prosus N.V. (PRX.AS) Earnings Call Transcript & Summary

Great. Thanks very much, and good afternoon to you all. This is the first call in a series of calls we're going to be having over the next few months to give you a little bit more insight into our businesses and our leaders in advance of the Capital Markets Day, which is on June 25 in London. We'll be getting the invites out for that in the next few weeks. Today, with me, I have the CEO of our OLX Group, Christian Gisy. Christian, great to see you.

Thank you, Eoin. Great to see you.

Yes. So we're going to have a little bit of fun over the next hour. Christian is going to give a presentation for the next maybe 15 to 20 minutes, and then we'll open it up to Q&A. And I think everyone hopefully will walk away with a greater and better understanding of the group and a view. So let's get started, Christian.

Thank you very much, Eoin. Yes. Thank you very much for all of you that are attending here today. And for me, it's a great pleasure to be able to present the OLX Group and unlocking the verticals is obviously the topic, and I will help you to get an understanding of what it really means to us. I'm now in for about a year, and I -- as some of you probably know, I came back from retirement, and the reason what got me back is that when I was approached around OLX, I knew about the potential and also I knew about the very strong position of the business across North Central and Eastern Europe. And across the last 11 months, none of them has, in any shape or form, proven me wrong. So I'm very excited to be here, and I'm very excited to now take you on the journey. Obviously, as you know, OLX has gone through a bit of challenging times across the last couple of years. We had to sell Avito because of the war between Russia and Ukraine. We closed OLX Auto, the asset heavy business, which I think doesn't fit into a Classified business. So this is something that obviously happened. On the back of this, we had a certain amount of restructuring. But now the OLX Group is rightly pivoting into where it should pivot and this is unlocking the power of our verticals. The direction that we are taking today is clearly towards Real Estate, Motors and Jobs, and it's all about our core countries, which are defined as Poland, Romania and Ukraine, supplemented by South Africa and also Portugal. Please, next slide. OLX today is active in 9 markets with 9 highly established brands. Brand awareness, whether it's aided or unaided, is most of the time #1 in the countries where we are represented. We have about 29 monthly app users on our platforms. We have about 64 million active daily listings on our platforms and we have sold last year. On the fiscal year 2025, we'll be selling about 27 million secondhand items on our platform. That gives you a bit of the magnitude of what we are really already trading as of today. Nevertheless, and that's -- the next slide, please. We have identified that in our core strategy, we need to focus more on what I call the core. The core is clearly identified by verticals. And the verticals can be delivered via the vertical platform, but also via the horizontal platforms. And the core to us today is clearly Motors, it's Real Estate, it's Jobs. And on the car parts, we are, at the moment, identifying for ourselves, is this something where not only we have a right to play and the right to win, but is this also something that fits into, what I call, being the Classified, which is mainly a subscription business, and this is something that we're analyzing and identifying. Still, car parts is an important and big business to us as of today. Next slide, please. To give you a bit more of a crisp idea what it really means to focus on the core categories, I would like to drive your attention to the right-hand side of the slide. The light green boxes gives you a clear indication of the growth that we have seen in our core categories, being Motors, Real Estate and Jobs, across first half year of '24 towards first half year of '25. You see that we'll be able to grow by 23%. And on top of this, we've also been able to increase our aEBIT margins by 7%, which tells you a lot about the power that sits within us if we start to focus and if we start to really go after those core categories. Nevertheless, also our other categories characterized by goods, service and advertising have also been growing by 14%, which is sort of in line with what the market is doing. And also there, we see sort of an aEBIT margin appreciation. But if you compare the two, you will understand that our focus now across Motors, Real Estate and Jobs is clearly defined and is something that we will continue to focus on. Next slide, please. If you put those numbers into the overall perspective of our OLX Group, you see that we have been growing revenues across the last couple of years, somewhere between 20% and 30%. I would say that 30% is probably an outlier because it has still to do with some recoveries from the COVID times. But it's fair to say, and I think the half year '25 towards half year '24 tells you the story that the company has been growing by 20%. And obviously, you can see also the margin appreciation that we have been undergoing. Very much and very far more important is what is our long-term ambition. Our long-term ambition clearly sits far ahead of the 20% revenue growth. That's the reason why we talk about 20% plus revenue growth. And obviously, we also want -- and this is part of the business of Classifieds business, very scalable. That means that by growing the revenues and keeping the costs stable, you are also able to deliver 50% plus adjusted EBIT margin. Adjusted EBIT margin is certainly not what our peers are showing. Our peers are showing adjusted EBITDA. If I think about the next year, about the fiscal year '26, as we call it, I would say that our adjusted EBIT should probably get us to somewhere USD 385 million. If I translate this into adjusted EBITDA, this will probably get us to $400 million or in an excess of $400 million for the overall group in the next financial year. So this already gives you a bit of an understanding of how much we are accelerating and how strong the company is very much positioned. Next slide, please. If we now look into our different businesses and now to our different categories, certainly, the largest that you have seen is our Motors category. And we have a very powerful Motors portfolio across all markets, which is, on the one hand, depicted by the brands. And we are clearly the leading destination to buy and sell cars. Next slide, please. The potential that still sits with us is very clearly depicted in the right-hand side of the slide. Today, we're generating something like 4% to 5% take rate of our dealers' gross profit. They all best-in-class are around 8%. There is no reason why we should not also be all best-in-class. And so this tells you that there's at least a doubling opportunity in terms of the headroom. And obviously, this is something that grows with the product. The better the dealer tools they're getting that we are producing, that we're offering, the more we will probably be able to tap into this profit pool. So this is a clear definition of what headroom is available. On the left side, you see that Motors has already been growing across the last couple of years around 25% to 30%. This is already also, again, a sign that we are very well managing this, and we're already very well monetizing that category on the back of the products that we will make available for our customers, but also for our consumers. Next slide, please. Still, we have defined 4 growth drivers. And let me probably point you to the 2, I believe, most important. The one is the increased participation in the dealer value chain with the dealer tools because this will allow us not only to be a partner to our dealers and to our customers, but this will also help us to make them more profitable. And if they become more profitable, we obviously have also the opportunity to get deeper involved in take rates, which gets us probably ahead of the 8%. Secondly, which is also very, very important is offer a great core experience. It is not only about best-in-class monetization, but it's also very much playing around with what we have, which are called the L-shape. We have the ability because we are strong on the horizontal, or we are leading on the horizontal, leading on the vertical. We can start to play around with this. We can transfer listings. We can play cross-listings. We can cross-sell. We can basically generate leads on the horizontal that we are able to sell on the vertical. So all of those elements are existing, but we have not been very focused on them so far, which will help us going forward to clearly monetize this category stronger. Next slide, please. Second largest category for us in the vertical space is Real Estate. Real Estate follows, if you want, a bit Motors, but is lagging a bit behind because the attention probably was more in Motors in the last couple of years than probably on Real Estate. Again, here, we are, in terms of brand awareness, far ahead of our competition. In Romania, we have also a vertical brand that's called Storia that has done very well against the #1 vertical brand there. So we are moving ahead, given the inventory, but also given the approach that we are taking to all of those businesses. We are the leading destination here as well to buy and sell properties. Next slide, please. The headroom that is with us on the Real Estate side is even larger than what you've seen on Motors. The right-hand side gives you an idea of what the median commission share in terms of call center or the amount of business -- of how you can get into the commission pool of the agent is. In average across, let's say, Europe, it's about between 5% and 8%. And as you can see on our dark colors, we are very far ahead of those. So we have an opportunity of quickly tripling and quadrupling our market share, our commission pool and, obviously, also our revenues. The revenues today already are increasing north of 20%. And with this in mind and with the product, next slide, please, that we're working on as times of the growth drivers, it will be -- it will get us towards those 6% to 8% and will allow us to get a hold of the headroom assessment that you have just seen. The most important part that I would call out here on those growth drivers is certainly the upgrade of the monetization model based on property value. This is something that is very important because this is something that will drive our monetization and will also drive the attention of our agents. Secondly, is the strengthening of the ecosystem. As much as I was talking about Motors around the L-shape between the horizontal and the vertical, this is also very much true for the Real Estate. You can cross-list, but you also are able to deliver leads from the horizontal towards the vertical. So you can very much play around with this in terms of the customer experience, but very much also in the consumer experience. The third that I would like to call out is this is something that is important to understand that in most of our core markets being, in this case, Poland, Romania and Ukraine, there's quite a lot of C2C listing. So if you think about the C2C business and you think about what Scout has been able -- Scout24 in mobile, Scout24 has been able to do in that space, this gives you a bit of also of an understanding of what we can do going forward if we start to implement the tools, if we start to implement the way you can monetize also the C2C area. Next slide, please. The newest kid on our block, it's new because the focus is new. It's Jobs. Jobs has been existing for a while within the overall, let's say, generally Classifieds portfolio. But only recently, we have decided to really focus on it because we have understood also what the potential is in this business. Today, we are the leading destination to find jobs and the best candidates in Poland, but we are a runner-up in Romania. We are very strong in many other markets, including Ukraine. And this is something that we are now starting to unlock. Next slide, please. You can see that in the past -- if I go over this time to the left-hand side, we've been able to grow somewhere in the double digits, in the low to mid-teens. This is something that we have analyzed for ourselves, and we come very clear to the conclusion that we are able to get ourselves very much into the 20%-plus revenue growth that I was telling before. This comes -- and this is on the right-hand side, if you see the monthly cost per listing that you are having with OLX by the value that we're delivering, this is just roughly half of what the market in a comparable situation would deliver. So again, the headroom that is existing on the Job side is again large and this will be increasing. Next slide, please. Here, we are very much focusing on the blue and over time into the gray collar space. We are not touching the white collar space at all because the blue and the gray has ample TAM ahead of us. And there's no reason for us try to fight something where, today, we don't have neither the product nor the positioning. We are very well positioned in the blue and gray collar space. And our main focus at the moment is clearly the product enhancement with AI. This is because it creates a superior experience to candidates and companies. I just opened up 2 events in Poland and Romania on -- with those products and the attendees, 500 each, were extremely surprised and very much eager to get to work with those products because they prove to them to be very efficient and absolutely clearly fostering their needs. So this is something where AI will help us a lot on the candidate side, but also on the company side, which then again, in time, will increase our monetization opportunities. We have a new monetization strategy that is shifting a bit away like on Real Estate, and this is also something that will help us over time to get hold of the headroom that I was showing before. And obviously, we want to advance the gray collar market because once you are strong in blue, the blue and gray collar market, partially the definition is sort of blurry and that's the reason why we have a clear understanding of moving ourselves more into the gray collar, which will, again, increase the TAM that we're focusing. Next slide, please. AI is, for us, a key enabler in terms of internal efficiency, but also in terms of our external positioning. OLX has across the last 6.5 years, and I did take the number because I found it very interesting, we did spend somewhere high teens to low $20 million to bring us on the forefront of AI, especially in the Classified space. And this is helping us to drive the future. Just to give you a bit of an understanding what it really means. So we have more than 53 AI use cases that are optimizing every aspect of the user experience, which is something that's more towards the external. Internally, we have been -- with the help of AI, we are now -- we have automated 97% of the moderation of the ads. That means that today, nearly no personal element is anymore picking into the space. This is more calling in, let's say, the internal efficiencies. We are using machine language-based pricing and, obviously, value-added services optimization with AI that will help us to continue to enhance monetization and profitability. We have about 10-plus generative AI use cases live in the last 6 months. I already had the opportunity together with Eoin to present some of you OLX Magic, which is a product -- which is a customer-facing product that we rolled out about 6 months ago to a subset of our group. And now we are starting to even further roll it out. This is a conversational shopping approach that is very interesting because it tells you a lot about conversion and tells you a lot about also how consumers nowadays will work with those products, which I think is important for us to learn because it has obviously an impact on the way we will drive the business going forward, especially if we think about more the general Classifieds where you will find the goods, the jobs and the services. Recent GenAI examples, we have been able to reduce the effort to post an ad by 40% on the goods and jobs side. This is something that, obviously, customers are very pleased about, but also consumers that are using those. And again, we have used AI to measure our marketing campaign. And given the efficiency generated, we've been able to save about 15% of our spend in that regard on our last financial year. So let me recap now. Next slide, please. As I said, I joined about 11 months ago, and I joined because I was so much convinced of the potential and also of the positioning of the business. And as I said in the beginning, this is something that has hold absolutely true. And with the decision that we are taking and with the direction that we're giving to the business nowadays and with the definition of the core in terms of the core categories but also our core countries, we are very pleased to be very ambitious about the prospect of our businesses, which will land somewhere ahead of 20% of revenue growth, which will give us more than 50% of adjusted EBIT margin, which will position us best-in-class to our global peers that are the Rightmoves, the AutoTraders, the Scout24s of this world. These are now the benchmarks that we're looking at, and this is the journey that we are on. What will help us there is clearly the revenue growth on a very stable cost base is the superior profit mix that we have been decided to move on with the core categories. And obviously, it's enhanced monetization. We are a product company and the products that we are delivering are very good. And therefore, we are -- we will be able to monetize those. So all in all, I'm super excited about, let's say, the near, but also the longer-term future of this company. And I'm very happy that I can report back to you now that OLX has a clear direction, has a clear avenue for growth and also for margin appreciation. Thank you very much. And now I'm open for your questions.

[Operator Instructions] I will pass back to Eoin Ryan to begin the questions.

Brilliant. Thanks, Christian. Great. You've got a lot out there in 20 minutes. But you had me at $385 million of adjusted EBIT, which is a meaningful increase. I mean if you look at where we've been from the last 2 years, we've gone from a margin of 11% up to 33%, and we have aspirations of 50%. So I think that last slide really clearly articulates what those stepping stones are to kind of continue to drive both revenue growth but also margin expansion. That's really -- that's fantastic. As we wait for the queue to form, let me just take my liberties here and ask a couple of questions, if you don't mind. I think one of the top questions that you'll see from here on the call is M&A. What we're seeing here is a much more focused OLX, much more profitable, but as you said at the start, a little smaller. Do you have aspirations of becoming bigger?

So Eoin, thank you very much for that question. I mean what I've shown today is a clear organic plan, and it's a clear organic growth plan. And this is what we and the team are focusing on. Obviously, M&A now is opportunity. And as we know, there are opportunities that are rising in the European market. And if presented to us, we certainly will have a look at it.

That's great. Okay. You mentioned on the auto side, focusing on dealer tools. Can you give us a couple of examples on what that might -- they might mean?

Well, I mean -- so just on the Motors side, it's very simple. I mean the dealer has cars on his lot and the car costs them every day because the bank, obviously, is asking for interest rates. So the question is, how can we help them to accelerate the turning of those cars? How can we help him to source the right ones so that, again, the acceleration of the selling happens? And how can we help him also to price the cars in the right way? So this is something where, again, AI data comes very much into play because the data is available, then you need to -- obviously, to place it correctly. Dealers have sometimes different outlets, and those outlets are tapping into different consumer buckets. And this is also something where we can help the dealer to really assess which is the right car for that bucket or which is the right car for the other bucket. And by the way, which is also the right price that will help the car to turn faster. So this is what we should think about when we speak about the dealer tooling.

Okay. No, it's exciting. You see, obviously, if you laid it out there well in the presentation, you have the autos piece that's up and running and a lot of runway ahead of it. Same is true with Classified -- with Real Estate. And then a little further behind is the Jobs with some more opportunity. Does IR fit in the gray area of Jobs? Can we get fit -- can we get IR listings there, too? No, okay. Look, I can ask you questions for the rest of the day.

Not yet, but yes, going forward as white collar. So we're seeing from that space at the moment.

My mom wants it to be white collar, but sometimes it feels like gray collar. All right. Let's go straight to questions right now. We also -- we have one from Will Packer at BNP. Will?

Firstly, could you update us a little bit on your thinking around the generalist piece and how you think of the opportunity and risk around Pay & Ship among your peers? We're seeing some quite differing strategies out of Vinted -- back under pressure from Vinted, said they remain pretty committed. And how that fits into your vertical business? And then secondly, we've obviously got the news on CoStar and Domain coming out today, which looks very interesting. Could you talk about who owns the #2 players in your various key markets and the potential there? How we should think about #2s being acquired, et cetera?

More than happy to. So on the horizontal and/or the general Classifieds, as we call it, I think the strategy is very clear. We have a very vibrant business on the good side that we keep. And as you've seen also depicted in the numbers, this is something that we'll continue to focus on. And this is also something where we have a clear strategy of how we are able -- or how we'll be able to keep the vibrancy. Pay & Ship is an interesting topic because I believe that the functionality is clearly needed. There is no doubt because the general Classified has become a more transactional business over time. So the functionality is needed. The question that you can ask yourself is, are we best placed to do it ourselves? Or is it better to basically use partners for this? And this is something that we are evaluating. Obviously, we can reflect on making use of our partner in Romania being eMAG. eMAG is, as you know, a company that is a Prosus portfolio company, which has lockers, which has warehouses, which has an ample logistic element and which also can facilitate payments. So this is something that we are investigating to understand for ourselves, is this something that basically we hand over to partners and where we make sure that the functionality is existing, but where we stay out of. In terms of the -- of our competition in the Central and Eastern European space, most of the #2 players are either belonging to [ Haringey ] like eJobs or Imobiliare in Romania or I think they also consolidated #2, #3, #4 in Poland. But I would say that competition is very far away from us. We are -- and you could see this also in the brand awareness. We are very much market leaders in those areas. In South Africa, on the property side, we are ahead of the competition. On the auto side, we have one Classifieds player that's called Cars.co.za, which is a distant #2, but it's a competition that is existing. Whether, I don't know, CoStar, Domain or others will invest into this, I have no idea. But I think if you invest into those businesses and you are aware of this, well, you need to see a potential to basically make a sort of inroad into the #1. And I can't really see how people will make an inroad into us.

Great. So let's go now to Robert from Kepler.

Yes. Great. I have some questions about the goods segments, if I may. My first question is why have you not defined the goods category as a core category of OLX? And maybe you could also provide some color on how large can actually the secondhand phone market is for the goods segment of OLX?

So to be -- so the goods category as such is never -- will never -- has never been and will never be a vertical category. The goods category is, by definition, at least of the past, a C2C business, which is not exactly what we're aiming for when we're talking about the core categories. The core categories is very much a B2C business, where you're monetizing customers, big dealers, agents, being employers and the likes. This is something that on the good side is not clearly possible. And as you can see across the last 10, 12 years, the goods business has very much pivoted. You have new entrants like Vinted that have taken certain share in the fashion and kids space. So you see a clear verticalization in the goods, but in certain of those categories. And that's the reason why you can't define good as a core category because then you would have to slice it into many little categories of which you would then probably come to the conclusion that the TAM is not large enough to fully focus on it. Can you repeat your second question, please? I didn't get that properly.

Yes, sorry about that. My second question was about the secondhand phone market and how large that is for your goods segment in terms of revenues or GMV? And maybe you could also give a view on how you think that market will kind of evolve? Do you think that will evolve to kind of like a full surface refurbishment type of business model? Or do you think it's going to stay in a marketplace?

So first of all, we have never looked at it just from a secondhand phone. This is part of what we call our electronics category within the goods category. And I believe that this is certainly something that, over time, will also move into more of a verticalized approach because just the exchange of the phones is not enough. I think the refurbishment plays into it and also other elements. So I believe that over time, this will certainly become a more specialized category in itself.

Okay. And I don't think we want to get, Robert, into kind of slicing and dicing what each piece of the goods category is at the moment. Let's move on. But thanks for the question, Robert. Let's move on to Marcus at JPMorgan.

Christian, one question I have or two questions I have is -- and one is obviously that you highlighted a lot the kind of like catch-up potential to best-in-class peers. We had our session on AI and before you get to be very excited about this. But what else needs to sort of happen in terms of better efficiency? I mean what about classic head count renewal? So what would you say that the businesses that you obviously now run and then you also entered into a year ago, from your perspective, how efficiently are they actually run? And how much is there actually -- how much can you actually -- how much can you improve margins just by running this more efficiently? And then I guess, AI and all the technology potential that we all see comes probably on top, but what is kind of like the basic cost savings that you potentially aspire and where does it actually come from? That's the first question. And then the second question is on transactional models. I mean hindsight is a great thing, but we've seen the movements in Carvana and AUTO1. We've seen, all of a sudden, management team is getting very, very excited about these businesses. How does that impact your thinking of these kind of business models within Classifieds? Appreciate they're not largely Classified businesses, but relatively close.

Marcus, thank you very much for the question. So my focus is clearly on revenue growth. The reason why I'm so convinced and why I'm able to lay out the numbers that you have seen is because what I think OLX was missing in all its beauty was a clear direction towards what are the businesses that we really should focus on where it is -- where we have -- where we can provide very interesting product that we are able to monetize and where do we really see the TAM. So that's the reason why I was saying, if you remember the last slide, the revenue growth is coming by itself, and it's coming by the product that we're able to ship into the market and also the headroom that is still existing. We'll keep the cost stable. And the teams that we're having are very good teams because they have already produced those products. So for me, it's -- and for me and the team was more a clear direction, a clear focus on what we're really going after like the conversation we just had around the Pay & Ship. Is it something that merits our attention? Or is it something that we hand over to somebody else because there are better people to do so? And I think those are the elements that really makes the difference and will allow us to get to 20% revenue growth plus and also to the margins. For the transactional models, Marcus, you know, I have always been somebody who says that Classified is a very asset-light business and keep it asset-light because asset-heavy is not in any shape or form the direction we should go and we should be involved in.

So the next question will go to Silvia from Deutsche.

So the first one is on the topic of verticalization. Since we heard other players also trying to integrate verticals across countries, I wanted to ask if this is something that you're doing as well or since you operate with different brands in certain countries, you do not see this as a key driver of synergies and rather play your strategy on a country-by-country basis? And the second question, just going back to the points around the autos business that was closed. Just wanted to ask for your views about the online car buying. Is there appetite among consumers? And do you see a way to perhaps address this category with an asset-light model? And then if I may, just a third on -- I mean, it's very exciting what you're doing on AI. I wanted to ask, what do you think is the main advantage for OLX compared to competitors right now in the space?

Pleasure. So on the verticals, it's very simple. I'm a big believer in keeping things different. And the way we look at the categories is not on country-by-country basis. This is probably sort of -- if you differentiate by country, you have probably a difference of 10%, 15%, that is not the same as the overall underlying business. But the way I look at it is that, yes, you may have different brands in the countries, but the underlying product, the underlying approach, sales, go-to-market, et cetera, is everywhere the same. And this is something that we have been starting also to put focus on, to direct the company on so that we're able to tap into the headrooms that we were showing. On the car side, everything that is not really a Classifieds business to me is maybe complementary to us, and that's fine. This is also clearly needed. But I'm -- as I said, I'm not a believer at all into sort of asset-heavy businesses. And I'm also not a believer in basically starting to get involved into logistics and the likes because this is not part of our DNA. We are not experts in those. And if we try to get near to this, we will fail. It's a bit like -- again, we have made our experiences, I guess, around OLX Autos and I think the experience has shown, we are not good at that because this is not part of our core expertise. On the AI side, I believe we are in front for a very simple reason. We have understood that AI for us is an enabler. It's an enabler to become more efficient in what we're doing internally, but also in terms of what we can offer to consumer and customers to make their life easier. And I think given that we have tried quite a lot around across the last 6 years, we are just ahead of the competition who has started to work on those elements probably not as long as we have. So again, the enablement is the -- is what we're really looking at because this is the one that makes us efficient and helps us to continue to drive the business.

Great. Thanks, Silvia. Now we're going to go to [ Maddy ] from HSBC.

I have 3 questions. The first one is, I want to understand the -- if you could talk about barriers to entry in this business. Specifically, if somebody comes with a deep pocket, how easy is it for them to disrupt and gain market share there? And what can you do basically to avoid that? So that's the first one. Then also, if you could talk about, given your -- what's the experience in the area, specific learnings you have had in terms of what doesn't work, what verticals don't work, what the specific areas of business or strategic steps which you would avoid going forward? And then the last one is a small one. I just want to understand which markets contribute the highest to your revenues and profits and which ones are subscale or loss-making and actually could be big opportunities as well?

Thanks a lot, [ Maddy ]. I mean the Classified is -- to me, is a very simple business. It's called listings traffic money. Inventory needs it. And if you are basically the one who has the largest inventory, you will always generate the traffic. Once you have the traffic, you are the top of consumer mind. And this is something that, to me, once you have reached such a position and once you are the #1 in the industry is what it's called also, not the #1 takes it all, is you are -- it's very difficult to be disrupted. I'm not aware of any Classifieds business that has a very strong #1 position that has ever been disentangled. I know from my past that there have been a lot of competitors like the heycars in Germany that's tried to buy the market with millions of marketing dollars and have not gone anywhere. I'm not sure at the moment to take probably a current example, how far CoStar is happy with their acquisition on the market. I'm not -- I don't believe they are really hurting Rightmove in any shape or form. So I think once you have reached such a dominant position, once you have the inventory and once you have the top of mind of your consumers, the customers will always be with you because they're in search of the leads. So that's the reason why I believe in the places where we are a distant #1, there is nothing that will -- should be able to disrupt that. Obviously, I never know what happens in kids in a garage that has a total different approach to the business that will -- that may disrupt. That's something that may happen. But if I look into the business as of today, I'm very confident. To the second question, [ Maddy ], it's -- I think, as I said, the asset -- the differentiation between asset-light and asset-heavy and expertise and nonexpertise. It goes a bit -- so we have been talking about auto and that stuff. But let's probably also approach adjacencies. I'm a big fan of adjacencies because it helps the consumer to finalize its transaction, maybe financing, maybe broker, maybe mortgages, maybe insurance or whatever. But we should never do it by ourselves. We should be a lead generation business that with AI can even qualify the leads even better, and we should be paid for. But we should never be ourselves in such businesses. We should not have a credit book. We should not have a finance book. We should never -- we should not go there. And that's my firm belief. And I think across the last 10 or 12 years since I'm in the business, this is something that every time that somebody has tried it, he failed because, again, it requires a different knowledge, it requires a different approach and there's nothing where we should be good at. And the third one, I'm sorry, I missed it.

Just the biggest markets for you on revenue and profit contribution. And which markets are upscale and what can be a big opportunity for you?

So the largest market for us, clearly, at the moment is Poland. Obviously, Ukraine also would be a larger market. But Ukraine, given the war, is obviously, as you know, under pressure. But Poland is, in terms of revenue and profitability, our largest market. We don't have what you call a subscale market, and we don't have markets where we're loss-making. So we are there in an ideal position. Nevertheless, we are obviously within that strategy of core and focus, identifying which countries probably we should leave to somebody else because there could be better owners than we are. But at the moment, Poland, Romania and Ukraine are clearly our core countries, and those are the countries where we are focusing on.

Let's go to sort of the written questions as well. This one is in from Cesar at BAML, who's a little shy today, I guess. Two questions, Christian. The first one is, do you see advertising becoming a larger percentage of revenue over time? And then the second one is, can you integrate fintech solutions into your business?

So to the first one, theoretically, yes, with advertising, you could go bigger. But I'm not a big believer in advertising because it's opposite to what we're trying to achieve with the focus of the core -- on the core. It is not good for user experience. It's not good for the experience overall. And secondly, advertising is something that is very much -- is very wobbly. So it very much follows, let's say, economical path upwards as well as downwards. And therefore, I have never -- we have never been focusing a lot at OLX on it, and I'm very happy with that strategy. In terms of the fintech. I think us working with fintechs, that makes a lot of sense because, obviously, the payment ability on the goods categories is very important. But I think, again, this is partnership and nothing that we should do by our own.

Okay. That's very clear. All right. Now over to Tim's written question from Allan Gray. He says, has OLX exited any countries in the last year? And do you plan on exiting any more?

So as long as I am on board, we have not exited any country. And as I was just replying to Cesar, we are considering certain divestments if we come to the conclusion that those countries are not core to our overall core strategy.

Yes. Kevin has a question that we touched on -- you and I touch on right at the beginning, which is how much of your strategy is dependent on acquisitions? But just to be clear, what we -- what you talked about today was all organic. And those numbers that we talked about and the aspirations are all organic. So acquisitions and divestitures would be additional changes to those numbers. That's correct, right?

Yes, absolutely. I think M&A for us, so the plan is an organic plan, and everything else is basically cream on top.

Okay. And Monique, your question was quite similar to that as well. We have another question on the phone from Alex from Sasfin.

Just one question, please. You showed the graph, which depicts the average margin that competitors with a median competitor achieves, very much higher than the margin that you're achieving in the business. Why is there such a gap right now? And what tangible steps have you got -- that you will be taking to achieve those margins?

Thank you very much. I think you are referring to basically to the take rates. And I think the reason why we are sort of -- let's not [ crazy ] on by why we have an opportunity of catching up is because in the past, we probably did not focus that much on those core categories. And obviously, we certainly missed certain monetization steps because we were probably not cognizant of the value that we were delivering and we're not asking the return on those. That's one. And the second is the way to get there is to provide the product that puts the agents, the dealers and the employers in a much better space. So if you help them to drive that business, if you help them to grow, you will be able to grow with them. This is a very normal path that a lot of our excellent peers have gone through across the last 10, 20 years.

Can you give an example of some of those tools that you can deliver to help you -- to help their business and get paid for that?

Yes, for sure. I mean if you look into the Real Estate space, I think the tools that create visibility, that helps the agent to source, but also to sell the property faster would be a typical product as such or on the dealer tool that, as I was talking with Eoin about. Now if we help the dealer to turn -- get the car faster that prevents him of certain, let's say, interest payments to the banks, those are tangible elements within the customer because he's making money, because he's growing his business, because he's getting more profitable, has the will to not only buy a product, but to pay for that product.

Okay. I think we have time for 2 more. You're up for it, Christian?

Yes, yes, sure.

Okay. Hang in there. Take a glass of water because here goes Robert again from Kepler. Robert?

Yes. I would like to understand a little bit more about the IT landscape of OLX right now. And maybe what is your IT strategy? And maybe some interesting topics would be has OLX integrated all these different countries and verticals into one tech platform or maybe you have a different platform for each vertical that you're focusing on? And so ultimately, how does your IT strategy and environments enable OLX to become an AI-first company?

So I think on the -- if you think about the IT strategy, we need to be mindful of unification and nonunification. I think you can unify categories, but you need to be very careful of unifying categories that do not fit with each other because once you think about vertical, you're trying to get very deep into the experience of your customers and your consumers. Where you can do a lot of unification and something that we have done is like -- it's on the mobile app approach. This is something where we have -- if you look into Real Estate, also Motors across all of our countries, you will see, it's the same design, it's the same layer, it's the same functionality. On the underlying platform, this is certainly something different and this is something that we're looking into. Obviously, some of them don't have, today, the micro services that probably you need to run it, especially on general Classified to be a bit more verticalized, but this is something that, obviously, we are working on. And AI, as I pointed out, is something that we have been able to integrate from the very beginning. And OLX Magic, I think, is the best example for it where we have really something that is customer-facing, which is conversational shopping approach, where you can really see how it works in conjunction with quite a large and bold platform that is sitting under the general Classifieds.

Thanks, Robert. And then we will go to the last call, and that is from Will Packer again.

Yes. Great. So obviously, Fabricio has taken charge of the business in the last 12 months and has come with lots of energy and a big focus on GenAI, which I think, probably everyone on the call is well aware of. One thing he's kind of alluded to is the synergy between the group's footprint in certain geographies. So for example, in Latin America, my feeling is that the mixture of iFood, OLX Brazil and Despegar, there's an inherent synergy between having those businesses. And so talking to the idea in this new world of GenAI, owning Classified assets and other digital assets is synergistic. Is that something that you recognize? And any kind of initial thoughts on some of the potential sources of upside there?

Well, I think it's a fair question and it's a good one because, yes, I believe in the synergies because in the end, the question is, can you identify the consumers that are on the relevant platform? And if so, how can you, with AI, continue to contribute and deliver them experiences, being products or other elements that will help to continue to retain them and with the retention also will enable you to continue to monetize them. So I think there is a merit to that. Obviously, it's early days. We're at the moment contemplating, like in Romania, what can we do with eMAG. eMAG is a big e-commerce or the largest e-commerce provider, as you know, in Romania, and we have a very strong footprint for OLX in Romania as well. The question is, is there any merit of new goods that you put under OLX that where we see that some of our customers would also be happy not to only buy used goods, but also new goods. So those are the things that we're identifying to understand what is the synergy and how can we go about it because it's -- there is synergy, that's clear, but the question is how do you go about it to really continue to drive the business model and, obviously, the revenue behind this.

Great. Thanks, Will. And thank you, Christian. You're coming up on your 1-year anniversary. Let me be the first one to say, happy anniversary. Let's close the call here. And maybe if you have some closing thoughts, we'll take them now.

Well, I think -- I mean, I love all the questions because they're pointing exactly into the right direction. It's -- Classified is a very interesting business in its own rights. And it's -- it can be a very protected and growing business and a very profitable business. If you start to combine this also with AI, so with the power of the data, of the underlying data and the understanding of the customers and the consumers, this is something that you can drive so much further where you can help your customers to basically grow their business and obviously to make it far more convenient to the consumers to find the good that they are looking for.

So AI enables OLX and OLX enables the customer.

If you want.

Did you say $385 million in adjusted EBIT for next year? Is that what you said?

Yes. Unfortunately, we're using the currency of adjusted EBIT, which doesn't resonate with most of our peers, but that's the reason why I said in terms of adjusted EBITDA, I would call it, $400 million plus.

All right. I think that's a good place to leave it. Thank you very much for your time.

Thank you very much, Eoin.

Good to see you. Take care.