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Ozon (OZON)

Participants
Alexander Shulgin Chief Executive Officer
Daniel Starck Chief Executive Officer
Igor Gerasimov Chief Financial Officer
Daniil Fedorov Chief Operating Officer
Vyacheslav Degtyarev Goldman Sachs
Miriam Adisa Morgan Stanley
Ivan Kim Xtellus Capital Partners
Catherine O’Neill Citi
Ulyana Lenvalskaya UBS
Kirill Panarin Renaissance Capital
Elena Jouronova JPMorgan
Call transcript
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Operator

Good day ladies and gentlemen, welcome to the Ozon's Fourth Quarter and Full Year 2020 Financial Results call.

Before I pass the floor to Ozon’s management, I would like to advise you that some of the information you will hear today may include forward-looking statements under the Private Securities Litigation Reform Act.

Forward-looking statements are based on management's beliefs, assumptions, and information currently available and are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented is not a guarantee of future results and that actual results may differ materially from those made in our suggested or suggested by the forward-looking information presented in today's call. Any forward-looking information presented is made only as of the date of today's call and we do not undertake any obligation to update or revise any forward-looking information. the refer release cautionary filings issued more explanation to the contained for you such in-depth press of Company's today of encourage to statements the in a forward-looking We statements. limitations inherent and SEC

IFRS of discuss the an the other in measures today. and explanation measures Ozon provide of also which most investors. for reconciliations non-IFRS useful financial adjustments Ozon During today's presentation information press will our Ozon Investor company's some to release call company's believes company website. And comparable non-IFRS is and measures metrics, on will available the other Relations include issued investor

the ahead. Now pass floor I go Alexander Ozon. Shulgin, will CEO Please of to

Alexander Shulgin

we us we welcome team, much call. today Q&A. and my inaugural about earnings financials Thank results. some make development, try discuss with give year business we'll for will Ozon’s and afternoon. going Good you. everyone the joining for and to the are Today morning, and quarter as Together possible good to XXXX and outlook fourth full comments the for to XXXX, Thank time you as

Russian aims diving recap our Ozon our online, goods like reliable into service would shopping and maximum delivery to and offering by to for transform buyers. widest the experience you. for Before selection of the vision numbers, for convenience consumers the I providing and fast

players. In strong largest globally still of is contrast, very partners. X% This Russia. players only to aim Ozon logistics variety from Russian fragmented three with Russia additional but these success remains and the is the with years. the greater Combination to XX%. and leadership, Plus, by XX% market global will invest the and limited broad of one result a only to tailwinds five due infrastructure X businesses to market aim e-commerce partnership market mission with initiatives, of we is investments core penetration commercial achieve in consumer as decades. the underpenetrated the at to buyers, adoption years also times Internet by last empower last and players at two Ozon. for – past a We investment just is market our not in through least our step-up offering business continue to e-commerce penetration. is To Russian factors such to over by our in set in top will three COVID-XX, high drive sellers, e-commerce, e-commerce across and for over the standards And with share in expand and opportunity. on and ecosystem online presents with partners scale a coming We economies all unique achieve this of us new grow deliver in fundamentals. e-commerce services Ozon fulfillment

say on words few this. how going we Let are achieve me a to

to to our do customers last and grocery, merchants for diversified build Our platform around Ozon customer such to been platform, invest fast-growing build which and can expansion, Ozon. for see and services to have strategy We in improved first-party have experience continue and business core and been positive direct of verticals and highly The merchants so years our effects technology online a to is strong assortment of to service to Ozon reliable network and connect and thousands aims In customers our Longer business, to accelerates partners. all sellers example. is sales order Ozon's as fintech buyer we further and including drives via attracting transformational in Russia the that more Marketplace platform offer stemming growth. term, convenient new This three we adjacent of contributes base and to best customers and our from loyalty. this user buyer for effect this, to will logistics the marketplace. millions

invested Our years, achieve than was in our and we fulfillment and primary coverage. with we scaling XX,XXX nationwide this, fulfillment over more logistics. focus square launched In three Marketplace quadrupled up. to footprint To from meters XXX,XXX

During attracted investments thousands time, we this marketplace, to effort sellers. buyers significant multi-category product also development. and concerted leading made This of in of us create which enabled millions

XXXX Our when X orders orders. platform in generated year, only contrast stark this on buyers Ozon million million our XX made past in platform to

Ozon Our just XXXX. of and in XXXX our With GMV at growth to we us of $X.X XX% Marketplace We X% e-commerce from currently XXX% XX% only positioned market. started. adoption. best over of of believe are we are getting Russian and for for billion But from year-on-year than retail benefit accounts accounts X% allowed to XXXX, market to accelerate in less GMV e-commerce

we’re further e-commerce market total already As billion. as our of which we aim within verticals, keep worth growing. developing into adjacent and penetration platform total $XXX our drive to expanding And addressable on more than addressable will market is

like Now to new about few words I would say our a verticals.

generator, our platform. the which business complementary is buyers customer more customers partners These experience. monetization enhance main sellers opportunities a offer services, Marketplace traffic we to online create services for Ozon bring and can and of and Ozon the Although additional number

we our solution buyers payments experience to loyalty buy buyers BXC Ozon. testing developed Ozon financial we at when financial This is idea solutions. offer. our initiative BXB sellers within smooth of me to encourages deliver In and services Let and and frictionless streams. we domain, pay sellers. and payments our using the in our lending engagement portfolio later this expanded The services. of lending year, We both and are that and past and solutions BXC now, and diversified highlight In

making amongst see aimed XX% greater increases is lifetime payback BXC Our customer buyers. for these faster value lending for We solution our means payment at order purchases cardholders. more solution higher-value customer This frequency Ozon period higher buyers. and retention. affordable Ozon

launch activated card business to virtual XXXX. customers via easier to aim in with sellers cards. we of materially been XXX,XXX Adoption over of of by the has end QX BXB card the stream, access In development XXXX, their of our of Ozon As the financing. support our accelerated

accelerated large generation promote products number which for base, for and to a increases online cost-efficient. adoption as customer the market. within frequency an And Ozon. Now retail customer of by for online the is grocery traffic acquisition is e-commerce also with in existing an and market due penetration immense less Thus, COVID platform opportunity is brand online It very grocery globally. driver represents higher Online easier also touch customer, grocery such ours. grocery of our platform Russia, than grocery helps the In X% of our important was points recognition.

built deliver network that groceries We a our allowed Moscow an in dark customers have Moscow stores hour. of us within to to in

range XX,XXX year-end offers a some assortment fine-tune regions currently to SKUs and of items, not food of the and concept to total unique closer Our model assortment non-food expand offered as SKUs. by typically was The Ozon including into Express the operators. dark store and store nearly further classic wide in XX,XXX dark aim is We XXXX.

of them would to to best-in-class far and champion of contribution I very Before and I Ozon with we look Officer talented transforms and e-commerce take Officer. as appointment for would building proceed, these Financial Gerasimov consumers Ozon’s to to to the good forward Operating congratulate like Russian Fedorov as Chief thank Igor opportunity Daniil incredible roles. the so success I two story Chief new their like them both to and dedication individuals local luck way shop. wish their working them that and in announce

discuss our Fedorov will to pass Daniil floor quarterly to the I Now results.

Daniil Fedorov

as Yes. Thank you, thanks Hi, us public earnings everyone, call joining for our Alexander. a first and company. on

already strong successful very we the during operational for note performance and you this IPO successful QX. As year seen a XXXX was a ended morning, on have with high a Ozon, year and

on mixed and and future on partners. financials Pandemic XXXX on a services discuss the Before more in in one to business impossible move other our Russia, and precisely business, determine COVID few positive detail, accelerated employees, impact effect operations for I of to our a on customers on which COVID-XX. in had it’s impacted COVID is our hand, business. On our COVID words our of adoption hand, But our the performance. online our

and and for many business courier our protective large staff of our proud non-essential partner On online, across Russia product centers, equipment ever rose ensuring courier stations, entrepreneurs the our To network essential deliveries. its offers Ozon for to employees Ozon our to school we ensuring I team, provision merchants delivery To We sell We increased e-commerce QX that products methods across XXXX households. offered enabled contactless of options. be door that was webinars onwards. customers way launched from the pauses can to safe pickup than of of customers and During deliveries COVID, safe, working of of introduced platform Since for business provided and the SMEs we conditions to partners regular retailers team The deliveries experts, and contactless Russia. migrate in it by to their Ozon wanted support of also continuity millions services. and payment online online. to products safe transition online, cross-docking range and of fulfillment more industry lifeline management behalf XX% reliable reliable safe sellers. for and a important contactless businesses challenge, a and and current points pandemic, to of staff. ensured our millions facilitated and Ozon are faster, employees, Russian Ozon than outsource say becoming many of more Russia start our countrywide our our wide across keep

across on significantly in up, moving execution in year-on-year. Now our QX QX. quarterly with units to sum pleased the accelerated business I’m results. To were GMV

accelerated improved we growth significantly flow, business, EBITDA reached also adjusted cash margins. positive to addition In the operating of

our accelerated and at GMV back a detail. on reached to services of billion, On across XXX% marketplace, increased RUBXX.X strong financials XXXX the buyers of in in the than Now growth Russian new In existing e-commerce to full to to XX% of primarily driven impact. ongoing XXXX. among increase buyers, growth let’s XX% back RUBXXX.X buyers by increase XXX% on year-on-year more compared and GMV on active of shift regions and fourth rapid XXX% amongst and including growth positive growth year-on-year. up accelerating order The billion, number strong network both look adoption the of quarter, was year-on-year. of more Russian with in sellers average year GMV frequency basis, order the

greater Ozon contribution by fueled regional has The now Marketplace also biggest growth GMV. is This was was sellers. Ozon share offering growth which is QX trading of of also quadrupled than more doubled base XX.X% base. merchants. Ozon’s constitute contribution seller around our In QX, jump to base nationwide Marketplace. and Ozon and XXXX. XX,XXX The GMV Much analytical greater from logistics advertising fast-growing seller comprehensive nearly of attractive in the merchants significant fast-growing over customer of access of expansion. from to large and and offers Regions reached to our GMV, XX% in tools compared fulfillment saw group’s attributable driver of We a number and for solutions. and business well services, now and sellers Marketplace

FBO supply sellers constraint solution are offering around FBO to allowing business also logistics’ in used flexibility addition now build Essentially, fulfillment we and for full needs. the Extended the and offers In for where logistics. backbone FBS, that’s their solution, Ozon

as our merchants. lending launched for have Lastly, we Alexander service mentioned, a

growing base, these initiatives to Although growth in it we and growing the customers as our retention by to and potential achieved, believe tripled XX will other number frequency allowed penetration even We is performance. the marketplace. with improved buyer’s current with annum XX% of quality is XXX,XXX time our has of almost the infancy, over confidence us long-term. were We GMV can XX% business. lower are will grow cohorts overall and in as far cohort grow behavior in is year. Improvements XX% on increase that their platform XXXX to parcels on XXXX our It that could to compared sellers increased for its e-commerce and buyers compared us that even to initial cohorts. Over underpinned is what be sellers the infrastructure delivery compared XX% the this orders for regions a be of solution use and encouraging almost Retention delivered continuing in cohort. mature and see this XX%. more that XXXX seller result service keeps We in million this QX attract as XXXX big GMV and helps see is the small as XXXX is first operating compared higher by are Both let’s improve two levels to much and of service. XX.X we the quarter e-commerce from per years. of of also to seen well. XX frequency can expenses. the trends still Order sellers buyer Ozon to improve in in gives our doubled fraction in market so cohort’s our our Strong to which fulfillment a by of And frequency that cohort and logistics Positive further multiple delivery. well. increasing times quality move is now sometimes all cohort in in the as of focusing a important XXXX times with increased year-on-year and believe frequency us Expanding

there sales absolute lines was is investment our rolling an operating volumes delivery increasing infrastructure and fulfilment, ramp Our stage Across in headcount. up cost Ozon and terms, expenses the significant our the marketing main and items expanding all growth fulfillment of in business in reflect delivery a and G&A. increase expense are and

advertising Our XX.X Sales customers’ technology digital and up our improve technology and as we XXXX, we product In our XXXX. increased increase platform high XXX% offline XX% into the seller by plan and talent as marketing development. XX% investments to to to general attributed of administrative expense as million talent talent million year-on-year invested processed marketing then growing to our most to orders our compared QX investment the in and to in in and nearly well delivery our Sales XX% as and experience Fulfillment acquisition enhancing we and was in were and and XX% respectively. pool. development and costs data capabilities. units QX, XX fastest accelerate second year-on-year, costs increased accelerate up expense

a negative of our and XXXX. strong in XXXX. GMV XX.X leverage, generated function contribution negative decreased cash negative and as activities in XXXX, compared CapEx a This of during The cost operating of in approximately scale EBITDA flow However, economies EBITDA season. word sheet. we as billion GMV of of balance lease the flow. working year adjusted noticeably, reported cash of utilization in operating RUBXX.X compared ended greater billion on the quick high a and billion a QX control. adjusted XXXX After all year great reached billion operating in Free cash percentage full GMV expenses was leverage, breakeven portion cash and flow, as scale. net cash as to operating or percentage flow RUBX.X of in strong a in negative the XX.X% cash the QX market of thanks OZON to In was X.X% improved company's principal US$X.X XXXX cash in basis negative calculate part very investments equivalents higher operation the from billion in showed growing fourth logistics improvement significant volume sheet a inflow to on capital and RUBXXX.X with RUBX.X less disciplined total A of we QX is flow. XXXX, quarter, from which Thanks of end XXXX. sales and to position, to liabilities Big near in from back nearly positive in QX XXXX. cash billion XXXX operating flow balance cash operating was of percentage Cash

We bonds year strengthened $XXX issuing in for our balance have further this by million sheet February. convertible

year an outlook provide as to would reflects the Ozon’s like that bear guidance to-date. expectations I mind full Please our XXXX. you of in for Now with

or would the by Overall, coronavirus may pandemic caused to As difficult I COVID-XX. be that conservative ascertain it potential our to disruptions be we overall like impact mentioned, new of is in guidance.

in our XX% related greater. to taking especially growth potentially and we uncertainty, grow considerations expect GMV by believe into We comps, COVID the of QX but could be

the to demand XXXX expects future Ozon higher its billion. to RUBXX plan adjacent – So verticals. of be year our All ahead to rapidly stay core plans overall, on to to or new We the growth and platform. between RUBXX in for billion capabilities expenditure and growing XX% to the of this scale and product be in believe greater. orders to and would continue to guidance be Ozon fulfillment the further we and marketplace invest capital this increasing volume compared invest

for our to unit And with scale, skill Although and economics we plan capacity giving remain strengthen not you I ready like strengthening improvement position I from building and with profitability, say execution in would to Russian leadership are any believe focused we'll in in profitability. are so overall that we investing with in guidance competitive greatest on building Q&A. And and liaising forward consumer you thank to We the new and on market. comes I We keep to scale. guess support far, proceed look my in long-term future. our

Operator

comes the Degtyarev your Your Instructions] Sachs. from Vyacheslav [Operator line question. of Goldman ask Please first of question

Vyacheslav Degtyarev

Thank very questions. Yes. the presentation, of for much couple you

one, midst we of elevated exactly ago crisis the demands. a in abnormal First year were the with lockdown

lapsing cash the command helpful? a the tickets GMV much. helpful? CapEx currently, made performance we going any will how secondly you the comparison of average currently can Thank flow stands? or XXXX, And comment can that generation these would directionally days if are end last very but maybe the March and you those outlook, of year you the days into you be be free about of As frequency with growth The

Igor Gerasimov

Igor. Sure, Vyacheslav, it’s

me please take your Let question.

the high extremely months demonstrate in confident COVID early to impacted growth challenge year COVID rates it end the full were the growth Russia one, COVID. elevated, the comps, approximately lockdown be And June, the tough a on you lockdown Nevertheless, guess rates can indeed comps as first Amid probably by we're mid guidance say in that last the or to Russia March about be might a of to it year. in our indeed bit about of speaking quite measures introduction to the starting I to quite for remember, fair the in therefore from So, COVID most region-by-region be of June effect used of impacts will in of and the compared year. quite measures last are varying basis.

year. mean the say. the impacted So bit our first is steps have in been guidance far, outbreak COVID confident I last mean only earlier we’re my time was which by which periods, by therefore, and second we're we're which probably making month that, most it's that in. communicated to confident Despite repeat quite you previously quite the your question? I colleagues something please And Can

Vyacheslav Degtyarev

regards was for cash the XXXX, on to with generation the CapEx. it Yes, flow have given free you guidance

Igor Gerasimov

and Yes. cash near just I operational mathematically be our investing therefore, We keep further were expanding infrastructure the need near mind breakeven, to to keeping the Russian inside targeted to and Moscow. into CapEx on in we our we had mean our regions footprint plan keep that that flow also

remain free biggest Our that of will driver negative. XXXX CapEx. in be cash our The will flow

Vyacheslav Degtyarev

very Okay. Thank much. you

Operator

Thank you.

of Our line Adisa the your ask Morgan question. next Please Stanley. Miriam from of question comes

Miriam Adisa

Great. Thanks everyone. Thanks for taking my questions.

sort if where comment what sellers you give from expect update mentioned you. that on trend more year long-term just then or take year would that? spend end in the of give think be you're any backlogged give last like has number? been moment could had your And some competition, just to after just on you XXX,XXX end level expect on I targets. previously could the you Firstly, that to made you as rates it just just I competitors, you pricing you finally XXX,XXX sellers get of of on the terms of this if you how an to of of Thank said there long change seeing at bit or in how a are in on we sort rates you color aggression anything sort could think you take us And sellers advertising to of on to Can towards that XX,XXX that? then year? the guidance looking changes us would any sort you onboard, of or sort should the of by XX,XXX

Alexander Shulgin

we the is Hi, discussed making to fruit Yes. we’re already Miriam that manage closer rates. sellers number sellers real give take back investment, market. seeing not And is tactical me numbers to made QX as we joining an sellers structure taking. Igor And the XXXX. currently. on the May, so allows bearing – strategy a acceleration do to cost help to strategy. from we our us the also, all decision inflow back to the sellers in previously, economics. on the unlock help see of on let's in I actually any the efforts just commission align the us us structure platform This We February, rates this decrease to we joining parts the on which take and see already of the think that are to unit mean, platform We're constant but to we some we Yes, of that are the the decision. of going report of address the

for As competition… the

Daniil Fedorov

the infrastructure, many many, want initiatives the which others. the product of launching mean, very very for would there We competition. new or competitors. changes expanding there to communicate us that to it's the any still not market And Yes, respect largely, competition. feel risk potential the be mean, I to make, our take ambition, We or which growth previous is seek that question communications is believe and the us can I honest, making execution which to on versus the our view our we and ability To in impact we for stage, is changed here. large. – has at little whether can very to actions Therefore, own any be with aggressive on our marketplace, the deliver new product biggest our actions i.e., aggressive by and our this nothing I still is of claims hard it

Miriam Adisa

Okay, thank you.

Operator

you. Thank

Kim question line comes Ivan Partners. your Capital from the Xtellus questions. ask of of Please next Your

Ivan Kim

my from please. questions Two afternoon. good side Yes,

First on XXXX. increases bit CapEx, quite which versus a

on probably expansion too? So, development you do this EBITDA then is incremental And given something I can on where adjusted that Is And just is for give margin was the already, for contracted understand secondly, whichever expressed or not mainly that profitability. fulfillment guidance else? CapEx or channel, Thank profit probably margin, But you. the tricky. easier directionally your that's comment you on XXXX? you that contribution

Daniil Fedorov

Sure, your increase. you CapEx, Ivan for behind reasons On a thank questions. few are the there

of many the square capital which preparing is of First be the you be capital our remember, kind XXXX. expenditure expenditure advance in for see some actually which we're quite to building in of objects might up, infrastructure, lengthily steel in every needs Because order is time. all, open. XXXX. which the demand for have us as probably price secondly, for the we for to of need Therefore, born produced there that a opportunity growth to prepared on fulfillment especially And bit space, of higher and we more meter more

is demand and to electronics It's this things, it category the which On profit, eager business I delivered sustainability, metric might get as at one to which is people the one is we or contributors of hours. and negative and And contribution mean, are previously, probably better initiatives Additional We you consumers related EBITDA or apply doesn’t in P&L to were proposition our mean, its metrics, or drivers although all because profitability remember, are on more behind for model also case, in ability express getting an our on this delivery, something we see any operating delivery cash into largely flow the and, working capital expenditure Express exclusively consumers related flow focused delivered big – is as fast. flow. two within to of other communicating very express operating its ultimately, our fresh, Ozon believe is flow. adjusted because operational cash we also are important buying profit healthiness obviously. stage, demonstrates CapEx is and that the cash we are that model necessarily one among and this generation, value way the on I communicating of increased Russian to important to why as cash opposed of a guidance

Ivan Kim

thank Okay, you.

Operator

Thank you.

the question your line Catherine Your ask from next comes question. of with Please O’Neill Citi.

Catherine O’Neill

bit a dark medium Great, cash. in stores wanted a there's I know delivery are thank in sort you. terms on delivery? how just for last-mile on-demand And about now, you term? of or managing if specifically, you're target I more Express you more then many to And delivery that a charge previously the that the question to with have XXXX understand of had but for around how is able people don't around really of other the of delivery, fee? pay you And sort said Express, expect to Russia consumers Express, use higher I

into balance sheet I any should issued your look aggressively some target? pushing from you've a fintech M&A a think on an as perspective, might deployment cash? bit example. of more the and mean, convertible. noted you for of of lot How are to of competitors areas cash year-end M&A we your got obviously there about the we of You've Are

Alexander Shulgin

This you for speaking. All the right. Thank question. is Alexander

cities, as we is So, expand that more. as we to dark need Moscow. to regional And our approach to obviously, Express some other region we one-hour delivery to open operate Moscow many as we'll and stores provide within need

in we to courier courier fees, delivery. open we So, We the started in and plan stores time, first this demand more apply the because dark nine service. to at year. Courier Moscow. all, of mid strong last this to would yes, all very there point are the initiative is for in, similar limitations I point in standard say, see At delivery operated we very terms which time,

and a few correlation words strong high delivery. assortment between see to on fast the delivery Maybe very is all business overall reliability model regions Moscow growth, So, on We assortment cities. speed, almost CapEx see expand for the first different and in we to – potential also and and provide this regional to wide very and follow-up of cover previous goal question. delivery it of Russian and in

improve last takes retention. As fulfillment of frequency and build And us thank we timeliness to larger as saw them. over that we higher investment now infrastructure. years, build to delivery make facilities, more the we higher and in decided Therefore, forward three fulfillment time customers we it with delivery

CapEx partially, XXXX. this for of high So is the season

despite past overinvest. we discussed, of period to behavior July, strong. we in Therefore, As since growth we metrics and that lockdown – the are customer very COVID – need

comment. flow, cash Igor, on our will CFO, Now

Igor Gerasimov

of up stage. anyone the organic very at we I development and fuel exact be remain organic deals a who this our key M&A, or do But the mean, have sheet, to various acquire. is use ourselves our product we any some not see targets very accretive And us that of can footprint of verticals inorganic. the we to and bit have our we poor in business. been ought to like On potential opportunities opportunistic Yes. in to and present cash be the team, the this but would balance which we as growth, which we've said case on in mean have of our conscious cash speed before. be rollout discussing both can at to have we We help having that, also can – allow with new remain where strengthen initiatives, will cushion I mind stage,

Catherine O’Neill

a noticed longer you've sort and how buying just marketplace. the group Actually, how question. I more maybe plans term? the launched Okay, recently Could comment on one of service you. great. could work be had meaningful these and you just Thank economics services I

Daniil Fedorov

actually. no always, Well, be Yes, we that from us, the I'll idea is honest that have Daniil. it. address This is mean, I answer would

see we that and as examples, we you viral in us there than see social definitely we very on. It's you group market. that So, making should globally And is the industry be the first good working and Chinese very – our steps. better buying are a we know something buying especially

But even to assortment for the it or have it's us don't On this We're to posted also about beyond going optimistic we I you goes. like – to value-add experiments, make how existing that. think want provide and you very optimistic we services, keep that want steps. essential to that. try and again, more is to And services first we would just overly try

Catherine O’Neill

Okay, brilliant. Thank you.

Operator

you. Thank

UBS. question of the from of question. your Please Ulyana next ask comes Lenvalskaya line Your

Ulyana Lenvalskaya

Hi, call. everyone, the and thanks for

missed is the and I and possible, in Could at infrastructure on you if please Firstly, meters, compare the current to beginning, to competitors. and tell us clarify, Yandex? capacity what if to Wildberries in moment square I that wanted versus the apologies fulfillment this your

Igor Gerasimov

the in parcels. it robust of is you how publicly have competitors very you the Sure, possess disclose case, probably the you it every as in the tell if numbers players, do what metrics. the a them. say other we general measure because, market, of say comes we In all not is if the the anything will we space one on diversified from I network And tell remain that, the need without a probably different. fulfillment the And be probably in most there sentiment, it of not that different of But both mindful our of to this in channels. any you, capacity fact context very that among when the bay Russian measures number this honestly, And we which use capacity last-mile the of focused exceeded by in however, the we to – have to have. of But And which players. available, do Ulyana. I have, see square if the big We floors very was terms player capacity e-commerce the unfortunately. fulfillment price And little, I’d to the which offer. in CapEx methodology on can not of right XXXX, in the And now. therefore, the we when behind significant terms it fulfillment high we the shows own quite might been numbers total our players our the one the run last-mile of meters. our making be which additional largest that, these we any knowing solutions, for you the to on is hand, in without efficient conclusions and on different. might see In difficult fulfillment by that. delivery by our model offered demand best-in-class mean, obviously, merchants, competition service infrastructure case, remind to additional we numbers which i.e., comes versus very buildup, terms for market end any quality rule investments see of it the we I guidance XXX,XXX Therefore, And at infrastructure. we be if have we our do infrastructure, you multiply new are Because buildup calculated. on thumb also number, would

Ulyana Lenvalskaya

or helpful. unit regions And discuss very That’s economics Igor. cohort to secondly, you, versus wanted maybe cities. big I Thank performance in the

more versus What mentioned that and the behavior or are of you’ve regions? in big now regions economics cities user are in unit So, XX% than the differences Moscow GMV.

Igor Gerasimov

therefore, which cohort people the Therefore, in and purchasing of regions lack of brands Yes, regions, in better. surprisingly, bigger of developed Regions we income, different everything the In Russian hear a I patterns. is Pete things cohorts the Moscow sure. And very their bigger fact for even levels performing our of mean, are like decent sometimes as and have. own influences analysts because online disposable top completely retail regions as the consumers, pretty cohorts and cities. numbers, is there. St. the poor some off-line cities perform they see albeit In that them, of in But expect region, assortment, were are and other setup. deprived lack well, to partially the regional performance well have in disastrous properly of that

Daniil Fedorov

Yes.

St. in of unit with on that’s – regions in infrastructure and or the terms Today, actual par terms quickly, expect up St. long-term, unit ramping just Moscow let in Moscow be In – to mainly terms economics. Petersburg but economics better, so Petersburg because me add of of is it’s we cities regions.

they So delivery of poorer, unit in I lockers up. they’re the fulfillment percentage a Petersburg Moscow because let’s or but better. say, being economics. the units either much points is still, maybe poorer points couple and of St. hubs, investment and drastically generate Not centers or, ramping stage, mean, And last-mile pickup But potential GMV.

Ulyana Lenvalskaya

when just and Okay, you be would thank Pete, St. XX% you. say the right? XX% regions, remaining Moscow And

Daniil Fedorov

St. and region Moscow Pete. is Remaining

Ulyana Lenvalskaya

Thank you.

Operator

you. Thank

your of Please Your from comes ask Panarin line questions. the Kirill Capital. next Renaissance of question

Kirill Panarin

Yes. everyone. Hi,

please. questions, two Just

Firstly, a on follow-up competition.

IPO? could impact your you as You expect your share for competition said budget broader it. your the the you key profitability from And of categories we be And if in this Should could a material and changed vision the more one. BXB on costs would competitive this that marketing GMV? But has number could give key maybe helpful. or color since segment That’s about share And further your path also there Ozon key year? That’s marketing anything within generally, terms opportunity, thoughts Ozon, talk on some isn’t initiatives Thanks. of the material here? on any secondly, of to landscape, size ambitions and at stage. improvement in on you

Igor Gerasimov

Kirill. Sure,

I've rates. standpoint. zero aware competitors rumors to by or deceiving post are indeed, proposition are or big materialize are to yield lots without the developed me plans buyers, public. whether as big market proxy competitive opportunity is conversion of incredibly of would marketing an space. Let Ozon for competition. And having We the even products mean, with And will without the dynamics. I I going of ultimately, and But I Therefore, even not competitors. and, for the and that from on pressure. view earlier, mean, will extremely over infrastructure marketing it proxy for investment especially as if exists the It is poor Obviously, our damage – we value start question development the and there to is marketing sellers nothing. you money of that are mean, too any amount obviously e-commerce XXX%, feel very huge any some But on claims experienced infinite in dynamics. the having of this of it the any think ambitions very, mentioned and result traffic competition with conversion probably zero significant respect competitive the the and spending competitive all of from stage spending still, to at if us of marketing marketing rates. development spend your the in developed probably big

On not proxy profitability. do model doing It focused way the on any the the more for profitability, cash – is us, we're communicate of path this better flow this because, we and business we're deliberately. on generation once is guidance a to performance. again, formal business And way

earnings but mean, I And I building And from growth. would prioritizing this and we're XXXX mean, sacrifice view, as if going have I results, opposed our per to it? e-commerce wanted, a positive have from been it footprint company we'll and the to and quite repeat However, our mean, you the our turn mistake, the gaining last was in I market EBITDA huge we having strategic that, is EBITDA, your landscape. hope question? evident to to said what share obviously, share Could Russian

Alexander Shulgin

BXB.

Igor Gerasimov

Yes.

of where one because several online are there a competition go is is – there there's and and opportunity for some segment huge see lot I off-line So We BXB, we There a There one. BXBXC segment segment that is there On see mean, segment. don't we by there is tender segments. let's see there. definitely potential. offices.

an believe why And basic and segments we're old we So And market efficient launched we big very there we there QX, opportunity. multiple it's are that's school steps. is, see just there. What doing overall there. in very

going be, products. the you working now the the to a We a we and got not recover the commercial So CGM on can we just in businesses on forth they But would do on mean, don't know more QX, with correctly, funnel, guide are integrating say, And on it our marketing. that not some we smaller working We including in on – any believe product, just on there's big the a again, of matters, impossible to And specific how I we start And seller some as we're – provide continue traditional fintech believe a apply to some example. difficult working and course, so actual ready of if I these We businesses could register advertising, ambition effort including we Consumer, us. big for mean, terms VAT, just enabled so so we services to usual, for some business. to as have receive worked our consumer. that out to documents that private all so to more they require internal as businesses, compete did it that mean, huge of businesses market. competition, it's players. base. we I be, some there targets. and because,

Today, business business represents there. X% in think year. we're like of zero to this from overall to So continue about, in, it's last going X% working example, about I for QX

continue that. goes. it we'll working how We'll see So on

Kirill Panarin

on Great. quick follow-up Thank you. just And the BXB. a

category similar or would it core different? In your be something to business breakdown, terms of

Daniil Fedorov

of likely less Well, like apparel. most of less books, of – it less food, looks

those beyond three So categories should be similar.

Kirill Panarin

lot. a Thanks great. Okay,

Operator

Your from next of Elena your Please comes question. question the ask of line Jouronova JPMorgan.

Elena Jouronova

Igor with and to their ladies A a and congratulations roles good Daniil please. and gentlemen luck. results Hi, and few for the and new congrats special questions,

off-line unit can profitability? to positive e-grocery, some at mean, So actually if a would a think is going while? related are cooperation you to question, to I with drag back in do first about thoughts to sense and you purchasing I order player what current And path scale? make it that point coming to foremost, your it your an economics profitability have give wonder or a for be

Daniil Fedorov

Yes.

this believe category try value. – me Let item that low – this. is the of challenge item that Look, mean, we low-value I

there food. breakeven. traffic. on it item there. a thing profitable, we’re you reference, by And can is the as So like – – category but itself generates be challenge, item yes, is One marketing has is looks sure economics. it for that’s important which they’re that Longer term, mainly coupon absolutely because is lower FMCG, and close including well this that, segment And the challenge value think value unit sells biggest low will the use to impact which I

category just be never mean, you right, perspective. FMCG, overall okay very be case. a own. it we its FMCG from be but could actually So food. breakeven. of at on this economics I do It’s look profitable, should quite People Would at have buy food. comfort shouldn’t the not itself level never good

do tend right in. much we be actually a Sometimes, bring on categories some a we we because subcategories rather from look loss-making we actually measuring now to as tolerance categories of start these efficiency perspective, category how measure the this category. And to have we LTV for work – economic these – marketing it some marketing at

categories. overall, I traffic believe even negative, slightly So we generates it’s if should it breakeven. be for But mean, all it should okay be because it

Elena Jouronova

improve then the could make the off-line small sense that in that any would with player your And cooperation grocery segment, – to for is you scale? something that purchasing

Daniil Fedorov

would online I could pay is doesn’t there Any mean to than equity for will all – platform difficult imagine we this join. all to to imagine that, our to utilize to welcome the mean, some is matter, right? Nobody doesn’t If everyone for it partnerships, that, for join for very in seller it will happen. marketplace. give are free. we difficult how just partnerships. anyway know equity. matter use it’s off-line, mean, so cash if what We don’t welcome maybe would a our this. rather I a we better how And welcome likely pay like I that marketplace, all we as as the be we retailers very

sellers. we So together as just grow possible, them so we be should a really would – would because join like to to Marketplace, Marketplace our we think difficult believe welcome cooperation that, work, I and very with to

a as not do we So look competition. at this

actually So we ready were everyone. embrace to

Alexander Shulgin

power. potential the the our business. related which I there which very probably any retailers there I with our is, answer us? can is Yes. stage. added for And complement and no. this offer purchase mean, to they scale. is purchase of thinking mean, – targets is business question The business, accessible things core little complement – is the On of among off-line some can Because are our to core than power can that, the M&A our Other would if which at be those your be This

Elena Jouronova

questions. I few a other And you. Thank Okay. have

the for noise. Sorry background

much slightly actually we business And in of very expansion So we reflect that your comment the QX, maybe Express a XXXX. in XP low well than the in idea can which on of improved thought. that expect keeping did an or to potentially you us XP Does bit? noted business? give of increasing better Are QX, you the Ozon what margins profitability there operations, and

Daniil Fedorov

good Yes, question. it’s a

Let that. me address

right. for brands be of where XP nevertheless, several for us. would model, growing continue the you’re But plan would essential that all, we Ozon mean XP anyway is actually of most was we not XP. okay this are – business. Express. essential of prefer we our do – – to in First today tomorrow XP who very Part likely to are idea of big year, because to I is and which them they developing so actually write-off plan of There kind many work categories

the bigger are we’re continue Express will we continue So, in sort can not I in on, our be in narrow significant that very over XP markets, versus we without plan peers driven will focus because we opened ramp focus Express peers, good growth and believe, of the terms which with procurement are demonstrates be and improve Express and that efficiency the a market. would by without stores working the materially terms on investments say, up Express, that assortment materially developing in and now to there to we growth of so of would profitability, like and of partially grow, nevertheless, even below stage, marketplace, down in focusing dark now in continue that players marketplace but we’re should and the we share as profitability

go part huge on that but So, prices, will we’ll margins we that be and overall to of profitability continue improve improving. actually into doing there see potential –we’ll efficiency

Elena Jouronova

I That’s actually. other XXX% thought a And few would with, Yes. have questions growth. what GMV

payable working running foremost, XP your and if XP or capital on with first to XP So, business? and or your that related days,

Alexander Shulgin

You mean tables?

Elena Jouronova

Tables. yes. Yes,

Alexander Shulgin

look, XP XP most marketplace of at both and QX look I you XP. would the our part basically inventory of reporting, marketplace to and if XP so would is related given is than in payables rather bigger be be think, yes, than XP bigger that that

Elena Jouronova

merchant that goes you before money into from business the pay effectively, merchant receive from So XP is you your to How the payables to just money how belongs the buyer does work? accounting or the your the accounting the perspective, straight when away, accounting? the your

Daniil Fedorov

the So, first, first for the case…

Alexander Shulgin

Yes. payables. the of sense Go

Elena Jouronova

growth. Understood. final kind question And in in of the I a the GMV on CapEx had and results

growth lift only mistaken the not the future. So, can GMV the you growth next IPO, this the is do XX% for the expectation If around midterm five XX%, to can big in of at you think and that but something intended I expectation understand markets the the growth that I’m CAGR CapEx time strong was GMV in over uplift drive that in this CapEx, leaves of actually XXXX, XX% higher? the GMV obviously be not with foundation do years

Igor Gerasimov

question. XXXX, Ozon that. But tricky wouldn’t I give you say you in term potentially opportunity this don’t in guidance. we for GMV really accelerate growth a It’s to probably longer Thank an that any our see Express also CapEx initiative of a bolts are with additional bit of and prices plus which higher increases please spending. part the requires mind steel keep in that actually developments and the

Daniil Fedorov

helps, we happy. can If if you we the Yes. be so that that I very you them, mentioned, growth choose tell that wouldn’t

So, we say. this is just the can maximum that

Elena Jouronova

That’s very clear. you. Thank

Operator

remarks. to I Alexander you. the for now Thank back will floor over his hand closing

Alexander Shulgin

marketplace, challenges year and you on of core of joining engine was sellers this your thousands and was improving the buyers so on the now a very millions past for To to today the The which GMV, Ozon. year of business, over up, for call Thank us joining questions. cohort gone XX% and certain our for pandemic the growth of sum despite this platform. of performance successful

and bonds sheet position scale convertible in building recent on encouraged We on results, in not IPO Thank our market in to focused verticals. the May. QX earnings by adjacent core on say a we market, afternoon. we’ll performance good our balance call issue as have our our look strong. e-commerce well on but progress We forward and you updating Following our as share and but grow our complacent, you are in is