X5 Retail Group N.V. (FIVE) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Welcome to our X5 Online Business Webcast and Online Conference and Retail. We are going to hear a presentation of the speakers. Then you will have a Q&A session. [Operator Instructions] And I've got to tell you that the conference is recorded today on the 25th of May 2020. Over to your speaker, Head of Corporate Finance and IR, Natalia Zagvozdina. Thank you.

Thank you. Good afternoon, ladies and gentlemen. On behalf of X5 Retail Group, it is my pleasure to welcome all of you here at today's call devoted to the development of our online businesses of our company. And today, you are going to hear the presentations from Head of Strategy, Vladimir Salakhutdinov; the Head of Perekrestok Online, Leonid Dovladbegyan; the Head of FoodTech, which is largely about express delivery, Vladimir Kholyaznikov; also Svetlana Demyashkevich, the CFO of the company; as well as myself and Andrey Vasin as well as representatives of IR. We're going to start with a short presentation. We hope to do it in 20, 30 minutes. And the presentation is available in the -- our webcast. Page 2 is our regular disclaimer. And then Andrey will tell you more about the rules for the Q&A. But now, without much ado, I'm giving the floor to Vladimir Salakhutdinov.

Good day. Good afternoon, colleagues, and I'll start with the presentation. And I suggest we move away to Slide 4. And before we start talking about just online businesses, let's talk a little bit about the e-grocery. And here, you can see the food retail market in Russia. And you can see that we see significant acceleration, which primarily was accelerated by the COVID. But anyways, this trend was open even before that, and this won't change much after. And now we are taking this into account in our strategy that this trend will accelerate. You can also have a look at the share of online services in other food retail businesses. And seeing in other countries, you can see that Russia is still lagging behind a lot of developed economies. And so we have a lot to catch up with. Now in the next slide, you are going to see the online food retail market. And this shows that its structure and segments are shown here. And here, we can see already that in the digital space, we also have different formats and missions. And this is already clearly differentiated with different players, and we see ourselves present in 2 key missions or formats. That is stocking up. That is online hypermarkets. And we are going to talk about our Perekrestok Online business. And then when we'll speak about the e-version of our proximity stores, express deliveries from both Pyaterochka and Perekrestok proximity stores and supermarkets. Now the next slide. This is our mission. And what's very important here in Slide 6 is that all of these missions, the e-grocery, they do not exist as stand-alone businesses. We view them as the continuation of our CVP in online. We are seeing that there is no clear line between the 2 because we are saying that they're very often more than 60% of our customers, when they come to the store, they already know what they will buy and why they have come to this particular store. So this is decided even before. It's very important throughout the customer journey to be with our customers, and this is only possible if we develop digital services. And so this is key for our development right now. Next slide now. Slide 7 shows our positioning as X5 in the online food retail market. And this is data for Q1 and for April. And according to Infoline estimates, X5 is #1. And I believe, right now, since the market is big, and we see such fast growth, that probably it is too premature to compare different players. And we believe there is enough space for everyone. And I'm also sure that those who are shown here, definitely, will continue to accelerate its growth. And together, we will build this market, and we will also build the customer needs. If we look at where we see ourselves, for us, the online businesses are not optional or stand-alone. They are part of our core business, marking out of our CVP, built around the core CVP. And long term or near term, we are looking at 15% to 20% of this whole market. And we know how to get there, and we are planning this in our strategy. Now I would like to hand over the presentation to the next speaker.

Thank you very much, Vladimir. Thank you for the presentation. And now over to Leonid Dovladbegyan, who is going to take us through that stock-up mission.

Good afternoon, colleagues. My name is Leonid, and I'm Head of Perekrestok Online. Perekrestok Online is an online supermarket, which is about stocking-up missions. What it means is that we compete primarily with online hypermarkets. As you can see, its share is quite big, and we also have express delivery. If you look at the global trends, the hypermarkets are losing their share. And the deliveries are growing. And stocking-up is still quite a big part of online. And this is exactly what we see in Slide 9. And top-left diagram shows the growth of the online hypermarket segment. Moving on to Slide 10. You can see that our business model is about the assembly of the dark stores. What are they? Basically, they are the distribution centers, 15,000 to 20,000 square meters. And we get orders from the app, from the website. Then what happens, we have a certain area for the delivery. And then in the dark store, we have the pickers. And the pick rate is quite high. And then the courier is sent to the client. And this is the most efficient, both for the stocking up. And this is good because it ensures high efficiency of assembly and shipping, which is hard to achieve at operating a supermarket. And here you can see what our dark stores look like. It's similar to what you can find elsewhere. You can see that it is highly automated, and we have all the high automation systems with high availability and quality. Then in Slide 12, you can see the evolution of perekrestok.ru's CVP. And we are quite fast with a wide assortment, very convenient with high quality of service. And our NPS last year stood at around 80%. And according to our model, you can see that our target is 50,000 SKUs. Currently, it is at 30,000. And it is a high-low model for the assortment and EDLP in assortment of the core products. So we grew really fast in the market, as you can see from Slide 13, and we are continuing our growth, and we are growing dramatically. Last year, we were #2 in the market. And this year, we are continuing the growth. And then on Slide 14, you can see our key operating metrics. As you can see, we have usual 40, 50 SKUs per order because it is about stocking up. We have 30,000 SKUs in the assortment. And right now, we have our 4 dark stores, 3 in Moscow and 1 in St. Pete. And additionally, I can tell you that we are also opening 1 in May. We opened I Nizhny Novgorod. And we target with the share back in stocking up by 2020 and achieving positive EBITDA from 2021. And this is what we are able to achieve. That's it from my side.

Thank you very much, Leonid. And I would like to ask our next speaker, Vladimir Kholyaznikov, to speak somewhat slower, so that we can catch up. Okay. Over to Vladimir Kholyaznikov.

Thank you, colleagues. This is Vladimir Kholyaznikov, FoodTech Director. In Slide 16, we show the new markets that started to emerge in 2019, and we saw the -- or great evolvement of the new segment. By 2024, we expect it to come to 30% of the total e-grocery market in the key markets. And 2019 was about piloting different services of express delivery with our ultra-fast delivery in 2019. It stood at roughly RUB 1 billion. And by 2024, it is expected to grow to RUB 200 billion. In terms of the segment, we believe that this is the industry and the segment that we'll primarily develop in big metropolitan areas like Moscow, St. Pete and cities with population over 1 million, where there are people who are really demanding express delivery. As to the key focus areas, the service is about a wide assortment and a hyperlocal infrastructure, good knowledge of the clients and really reliable delivery. Slide 17 shows our business model. Express delivery business model uses our own infrastructure, our own stores, supermarkets and proximity stores, Perekrestok and Pyaterochka. And we use mobile-first approach. All the orders are placed through our mobile apps. Now we have 2, Pyaterochka.Dostavka and Perekrestok Bystro. And we have the system of routing, which sends the order to the nearest store. And their picking and their assembly is fully integrated into the business processes of the store and the company overall. And the quality assurance and the picking is done by our store employees, and that's a new business process that we have already introduced in 200 of our stores. As to delivering, we hand over that assembled order to our partners, third-party couriers. We have 20 different partners in different sectors of presence. In terms of SLA, given the COVID situation, our click to deliver before, it was 1.5 hours. And over the past weeks, we have targeted a shorter delivery time, and this is around 45 minutes in the main geography. And up to 45% of our orders are delivered within 20 minutes. So we've positioned our ourselves around the current positioning of our chains within X5 Group. So the online business is an extension of our off-line business. We will continue our focus on own infrastructure of 16,000 stores. And we see that 76% of our households are within 1 kilometer from one of X5's stores. And in Russia, overall, we see a similar number, which means that we can ensure quite a competitive delivery service long term, as the people in the cities are ready to order online. As to the operating model, the main difference between the format is that we focus on quite a narrow assortment. That is a proximity store assortment in Pyaterochka right now is the main metric, apart from the categories that you cannot sell online. It's around 4,500 SKUs. And in Perekrestok supermarkets, it's around 8,000 SKUs. Then Slide 18 shows the basic achievements over this short period of time. Right now, 200 stores are doing the express delivery. And we see to -- around 12,000 orders per day delivered. We see quite a high average ticket as compared to brick-and-mortar. It's around RUB 1,800. We are delivering quite heavy orders. It is 12 kilos and 15 to 17 SKUs. As to our current position in delivery, we offer the paid-for delivery. They pay RUB 99 for all orders. We believe that we are strong in availability and affordable prices. Right now, we are big in Moscow. We have covered 80% of households in St. Pete and roughly 100% of all households in Kazan. And by the end of this year, we expect to enter 6 other cities with a population above 1 million, both with Perekrestok and Pyaterochka. Then in Slide 19, I just have to thank you. That's it from my side much.

Vladimir, thank you very much. Thank you very much for this presentation. Definitely, we are happy that we were able to squeeze the presentation in the 20 minutes that we allocated. And now Andrey Vasin will tell you how we're going to enter the Q&A.

Yes. Thank you very much, colleagues. Since we are running this as a webcast, and some people have used phone lines, some are on the Russian lines, some on the English, write down your questions and send them to us. We will try to answer all of those. If you are in the Russian line, just write in Russian. And once again, the speakers, please make sure you speak slowly so that we manage to catch everything. Okay. Natalia, she will start with the first question.

All right. We already got some questions. And I suggest we start with the strategic questions. And Vladimir, the first question to you. Could you, once again, put into words the strategy of X5 in e-grocery? What segments do you believe are most promising? And what are the most exciting new services?

Okay. So we have to -- Vladimir here. Probably just a few things from Vladimir Salakhutdinov as Head of Strategy. Now this is our vision about working in the digital space. We are covering all the client missions in the digital space. Everything that is about buying food, that's about online hypermarkets, for stocking up and as well to buying with express delivery. What's very important for us also, we are looking at -- like I said, at the digital space from the perspective of the customer journey. And we want to be everywhere starting from planning and to the selection of what to buy and where to buy. And buying itself is also there. And the third important point is that we are not scaling up the services or the businesses where we don't see positive economics. We are not looking at digital as, once again, stand-alone venture projects that are not related to the core business. Today, we cannot talk about retail without taking into account the digital component, online component. We only scale up whatever we believe in, in terms of positive economics. And our promise to the shareholders is that we achieve positive financial after 3 years of operation. And this is how we develop our digital strategy.

Thank you very much, Vladimir. And the next question probably is a continuation of the previous one. It's to Svetlana. When did you start investing in online? How much did you invest? What is the potential return on these investments?

Good afternoon, everyone. That's true. We started the first pilot projects in Perekrestok in 2017. And after that, just as in all the other businesses, we pivoted our model because we always use iterations. We start with the pilots. Then we find the model which we believe is most efficient in terms of growth and our financial results. And then this starts actually scaling up. And this is about Perekrestok Online. As to express delivery, we started investing in this last year, and we started with local pilot projects in a few stores. And then we had a better understanding of how we should build a platform. And we went through the acquisition of an existing team of a platform, which insured there is a much-needed space for the development of the service. And so it is up and flying already this year. For understanding the scale of investments, we would like to give just a few estimates. Starting from 2017, if you look at CapEx, it has been around RUB 3 billion invested and a comparable number of the OpEx that we had at different stages of the project are considered a cost. We believe that for the total scale of X5, that is RUB 5 billion to RUB 6 billion. For the development of very significant and visible businesses, which are visible and significant, both for X5 and for the whole of Russia, are very efficient investments. Let me remind you that we have as the internal requirement of 19% of IRR. And so all the new businesses should be in line with that minimal IRR. And this is what we achieve and overachieve as an additional condition. After 3 years of initial investing, we should achieve a positive EBITDA. And Vladimir already mentioned this, and, so far, we have adhered to this, we believe that in Russia, this is a base position that ensures the right investments. We are not ready to invest into loss-making businesses for many years.

Thank you, Svetlana. Leonid, the question to you. Now so far, the leader is Utkonos. Are there any advantages in the operational model of Perekrestok, which will enable you to become a leader?

Right now, we see that Perekrestok Online was the fastest-growing operator in 2019. And this is quite a mature business, and now we are at #2. And it also shows excellent results. As to the operating model, given the purchasing power of X5, and given the strong operating model with dark stores of 20,000 square meters -- 15,000, 20,000 square meters, which are located in close proximity to the customers at any ways. So they have the right space to ensure the stocking up our mission. It means that the target for us this year is 50,000 SKUs. And in St. Pete and Moscow, we are using this model. And we believe that the dark stores there are ideal for the logistics. And we have now 16 to 18 stops per truck per trip, and this is very good. And so we also see that customer retention numbers are great, which attests to their efficiency of the operating model. Let me talk to you separately about assortment policy and our -- two-hour delivery, which are an excellent result in the market, giving really high-quality service, which makes us operationally efficient and attractive for the customer.

And now the question is to have Vladimir Kholyaznikov. And this question comes from several participants. What is the difference between the delivery model between different players in the market? And how is X5 different and maybe better from the competitors in express delivery?

We are definitely leveraging the main advantages of the company. We are building the delivery around our own stores, on the basis of our stores, which long-term means a faster rollout and much lower CapEx because you mentioned a few ways. The main models that they are using is about building physical infrastructure, such as a set of local dark stores in the cities of presence. While at X5, we piloted both models. And we decided to develop delivery using our own stores because we saw that in terms of a rollout, CapEx, additional OpEx, when it comes to overhead, we believe it is more efficient to work from own stores. And in terms of the working capital and the ability to sell our own inventory from the store faster makes that model a lot more financially resilient and robust. We will continue developing in regional cities. We'll see what it looks like. But right now, our main focus is on this type of development. Moreover, a significant part of the results we showed in Q1 is relying on the access to those customer base. And with about 40 million of loyalty card customers well, those are active customers, we have even more who have taken loyalty cards, but then stopped using. And with the loyalty program enables us to offer, to access and to former customers the services that would help us to expand the introduction with the customers. And we believe that. As to CapEx, definitely, we have an advantage there. The integration in our existing processes in the stores will give us an advantage in terms of OpEx as well as the knowledge of the customer and access to the customer and the fast rollout of this service, definitely are our competitive strengths against the other players in the segment. Thank you very much.

Dear colleagues, I would like to tell you that you can download our presentation in our website, in the Investor Relations. And let's move on with the questions. And could you provide a comment on the forecast about the different shares in -- of the e-grocery market? And do you think that the online marketplaces will grow significantly? Vladimir Kholyaznikov, this is a question to you.

You can say that, right now, the market initially has already shaped itself. And now hypermarkets are really big, but we can say that all the key marketplaces that are out there in the market have shown interest to the e-groceries. And express delivery has been developing fast. And our estimate show, that is also confirmed by different analysts, is that the key players, those that are building their ambitions in the market, they will take a certain niche in the market. And this share will increase. So that's about express delivery and online marketplaces. Probably it has to do with the fact that they are at a very nascent stage. In the next 2, 3 years, their volumes will go up significantly.

And Leonid Dovladbegyan also wanted to add something to this.

I just wanted to add that, right now, when you look at the redistribution of the shares have to do with the express delivery. For example, what will -- we sold you over -- during the lockdown. And we don't see a significant change in the share of our marketplace. That's because they are about stocking up. And if you were talking about traditional marketplaces, probably the share of express delivery is growing, but we don't see dramatic growth in online marketplaces.

Thank you very much. And the next question is, can you cover how the pricing policy in express delivery is different from the online hypermarket and off-line? And how much more attractive is X5 against the competitors?

Probably Vladimir Kholyaznikov can start this, and then Leonid will add something about the online supermarket.

Yes. Thank you. It's Vladimir. Thank you. This is Vladimir Kholyaznikov. And if you look at the pricing of X5 in express delivery, is just to get enough there. So therefore, our new customers would use the shelf prices, more or less, as we don't have separate pricing online, although we do have some promos around additional benefits for the royalty program. But anyway, that assortment is in line with our online store of X5.

And we are building up on this -- the express delivery, and it is about omnichannel. Perekrestok Online is about stocking up. And in practice, it means that we are building the prices in terms of the top products. And we are setting ourselves against direct competitors in online. So this will use different systems of price comparison. And this was quite a big system of pricing. And most of the times, we work directly with the suppliers. So we receive back then to the dark stores and then deliver from the dark stores. And we deliver inside express delivery from the stores. And we build their prices in online visits. So on high-low pricing policy, which means that our prices are low, and we are very market-driven as compared to our competitors. And we see that our customers are buying from Yandex.Market. And from now on, they are competitors. We're quite relevant there.

A few questions to Vladimir Kholyaznikov about the express delivery. What potential do you see for expanding the assortment in express delivery? Do you have a plan to move to your own courier services? What are the advantages and disadvantages for working in-house and also in couriers?

In terms of the assortment, yes, we do see the potential for expanding. And just as our retail chain, so we see that there is interest to ready meals since we are going to expand this segment using our existing infrastructure, our kitchen factory and cooperation with existing suppliers. So we are going to add these items. We're going to test ready meals. We also expect the authorization maybe this year to sell alcohol, and then we will be able to do that as to courier service. We see that in Russia as the existing market for online has quite a competitive offering in 3PL logistics. We see that in different segments. And there is quite a rich range of players. So we expect some different services, both in regional centers and metropolitan areas. And so we don't see significant difference in terms of quality of service between in-house and outsourcing because we, as an IT platform that is built inside X5 for express delivery from our stores. We are using the power of crowd-sourcing solution is using around 10 different partners for courier delivery, which are co-creating the service with us for us. And so with open competition, we are doing it quite efficiently. Going forward, definitely, we will look at different options and scenarios where we're developing the delivery service, and we are going to adapt to events and then market conditions. Right now, the dynamics is such that as offerings in the courier markets are increasing. So in the COVID outbreak, we see that every single service and taxi aggregator is doing the last mile. So it looks like the competition there is high, and it means that you can get some good terms from them. Going forward, we'll adapt. We'll see.

The next question is to Vladimir Salakhutdinov and Vladimir Kholyaznikov. Can you tell us about Perekrestok Bystro? How is it different from the delivery from Pyaterochka? And why do you want to develop 2 brands?

Vladimir Salakhutdinov. I will start, and then my namesake will continue. Like we said before, the delivery from our chains is the expansion of the CVP of a particular chain. And this works for Pyaterochka, and this also works for Perekrestok. And it is built on a single platform. And we do use the same operating principles, and Vladimir can probably provide more color.

Yes. Thank you, Vladimir. Actually, as to our approach, in the headquarters of the X5, we build a centralized platform that then integrates our chains. In terms of IT, CapEx and operations, the costs that we are additionally utilizing, what we have already invested in. Both of the chains in terms of the business are providing the customers a chance to buy additional more products. So express delivery is about additional buying. It's -- at Pyaterochka, it is the main -- the core buying. Then at Perekrestok supermarkets, this is something that they normally would buy from the off-line Perekrestok store. We believe that it is a very good fit for the services of these both chains. And we are going to give the existing customer base of 40-plus million. And in terms of consumption and understanding of the customers of our services, we believe we have been able to differentiate them quite well. So we do need them quite well. And we recognize well when and how they are ready to buy. Those apps have the pricing of the chains. For Pyaterochka, it is a narrower assortment. For Perekrestok, it is quite a wide range and a lot of ready to eat, primarily in-house produced and some coming from our supply chain. So the central operating platform and the single operating model enables us to offer the customers yet another customer journey under the brand of each of those chains.

Thank you very much. And the next question is around cannibalization of online services by online services. And separately, in the express delivery, we said that there isn't much cannibalization from the express delivery and proximity stores. And some people find it hard to believe.

Let me, let's say, a few things since we operate several formats, we always track all types of cannibalization very closely, and we always do financial modeling. And when we approve the model and when we do the piloting, we always check out for cannibalization. What we see in Perekrestok Online, this was one of the items we tracked, we measured with the Big Data. And we try to assess the effect of cannibalization before the rollout. But given when we are talking about opening up a -- of other stores, whenever we open a new off-line store, we always add the initial cannibalization that we calculate according to our statistics. And we use it as an input for every arm of one store opening. And we always make sure that the IRR is right for both the old and the new store. So that those operations stand-alone should ensure the right return, given the cannibalization that we measure regularly. So the overall approach is like this. And probably, you can add more details.

This is Vladimir Salakhutdinov. There are 2 things you've got to account for. One, there's a broad philosophical question. This is what you see in many industries. For example, the telecom, where the Internet and the data traffic is cannibalizing the voice services, which doesn't mean they should stop that. This is our approach, too, in our development. And so when we look at cannibalization, how do we know it's not that high? We did research, and we saw that when we add the express service from the store, we saw that the biggest growth happens among the customers, which were not loyal or regular customers. And if you look at those, who regularly come to our stores, they don't use that much express service. And we see extra usage of express services by those who've used us before or used us from time-to-time. And so this is something that we were able to confirm.

And the next question probably is to you. What is the EBITDA in the online operations when they reach maturity when they ramp up? And when are we going to get the positive EBITDA? After 3 years, what would be the investments by then?

As to the investments I already showed you how much it has cost us. We have different levels of investments in different areas. Perekrestok Online, this is that CapEx into building dark stores and buying trucks. And in express delivery, it is primarily about OpEx. And the biggest cost item is courier delivery. You've got to understand here that in terms of how we see the online businesses and express delivery, express delivery is part of the existing off-line businesses. And they are a part of the economics of those online businesses, both in terms of the costs and revenue. We are definitely making sure that the additional extension of the CVP and services wouldn't dilute our existing businesses. We are aware of that. And as to Perekrestok Online, it's about the model. And since the model is more mature here, we see very positive dynamics. And this year, for example, we saw that for the old dark stores, the business economics were positive. And it's not about the pandemic, but also about the successful development of the services. And some of the assumptions that we've put into the model last year has been overachieved.

Thank you very much. If I could add a few words. I would just like to add that after Q1, we saw that 2 dark stores had positive economics. The third achieved positive economics before COVID-19. And COVID has not even influenced that. So it's just the new dark store, which is not yet fully utilized that is ramping up that has not yet reached positive economics.

And the next question is to Vladimir Kholyaznikov. We know that express delivery in Moscow operates through dark stores, not just for operating stores. What is the advantage of this model? Can you assume that after an ordinary Pyaterochka stores, we will open dark stores?

Thank you for this question. Yes, in Moscow, at this point, we have 7 dark stores. And in terms of the approach to the development of the new business model, we are actively piloting different concepts that we see in the market. Right now, the average life of the dark stores is 8 weeks. The others are even younger. And in development so far, we are not targeting to make a lot of deliveries so far from the dark stores. But we are ready to look opportunistically at our own network. And wherever we see high density for this, probably they can do online orders. And in these situations, probably sometimes, it would make sense using enough, too. And we are refining the model. But yes, we have not fully analyzed it yet. We do not see as of yet metrics that could make us change the existing strategy. We will continue piloting the new model, and we will also pilot new concepts that will be in-built into our own stores and also the dark stores to identify what the model of express delivery will look in the next 5 years.

I would like to add just one more thing. I believe what's important here to understand the advantages of the fact that we have multiple formats. We can use some components of our business. For example, that's true where we open the dark stores for express delivery of Pyaterochka. In terms of Pyaterochka stores is that we relocate the stores that underperform. And we can experiment with them as dark stores. Or for example, the dark store for Perekrestok Online could use the former Karusel hypermarket facilities. And we are leveraging here our advantages. And here, we are looking at the leverage of our customer base. And that's also a future advantage.

And now a few specific questions to Leonid. How many dark stores in Perekrestok.ru will we see by the end of 2020, 2021?

Now look, and now we have 4 dark stores, 3 in Moscow, 1 in St. Pete. The fifth is going to be opened on the 30th of May, very soon, in Nizhny Novgorod. And we are looking at the opportunity of opening more dark stores, and we are looking at Moscow, St. Pete and yet another city. The final decision hasn't been made yet. And so far, I cannot provide a comment on the number of dark stores. It's premature. Because of COVID, we have accelerated the development by 6 weeks, and we are revisiting our plan. And before COVID, we expected to open 5 dark stores, both in 2020 and 2021, but most likely we are going to increase this plan.

Thank you. One more question about Perekrestok.ru. Are you going to increase the assortment in Perekrestok? And what will happen with an average ticket? And Vladimir, probably -- Vladimir Salakhutdinov would add something here from the express delivery aside.

The average ticket is growing year-on-year. And now, we pay RUB 4,500 until we see the transform to further growth. With the assortment, it's around 30,000 SKUs and 33,000 SKUs right now. And we are planning to go to 50,000. And next year, we expect a further increase it. So far, we are looking at the threshold of our 100,000 SKUs. And here, it's not so much about the numbers, but about how the categories will expand. It's about a bigger hypermarket, which means adding more fresh groceries and also associated goods, household care, household goods. And we could make a big entrance into kids' goods and pet retail and household chemicals. So these are the main categories for growth. So it's not about the number of SKUs, but rather about making sure that we have good positions in all of those categories growing vertically.

And a short comment for express delivery. For us, the ticket is at an attractive level. It is RUB 1,900 in May. In April, it was worth more than RUB 2,000. And we are not planning to promote the increase of the average ticket. Our initiatives will be more around ensuring that we have higher frequency of interactions with the customer and the increase of our target audience. Because we believe that one of the differentiators of express delivery is a big addressable market. And the smaller average ticket will go into that.