Prosus N.V.
Q3 2021 Earnings Call Transcript

Published: 22 Nov 2021

[Operator:]

Good day, ladies and gentlemen, and welcome to the Naspers and Prosus Interim Results Call. All participants are currently in listen-only mode, and there will be an opportunity to ask questions later during the conference. Please also note that this call is being recorded. I would now like to turn the conference over to the Group Investor Relations Officer, Eoin Ryan. Please go ahead, sir.

[Eoin Ryan:]

Thanks, Chris, and everyone for joining the call today. On the call with me today is our CEO, Bob van Dijk, and our CFO, Basil Sgourdos, who will walk you through an update on the Group as well as the financials for the past six months. Then we'll open the call for questions. Before I hand over, a quick reminder and a few housekeeping items. As you know, Prosus is a subsidiary of Naspers and its financial results almost completely account for Naspers' results. To ensure that shareholders of Prosus and Naspers are provided with the information simultaneously, we're having one call focusing on Prosus' results, but where necessary, we'll highlight the impact on Naspers. We report revenue and trading profit on an economic interest basis, meaning they include our proportionate share of the results of our associates and our joint ventures. The results of our associates Tencent, Mail.ru, and Delivery Hero and others are reported on a three month like. Importantly, free cash flow is a consolidated number as associates and JVs are fully funded via M&A. And finally, growth is in local currency, excluding the impact of M&A. We distributed our earnings material through our Investor Relations site, this morning. And you can also find the replay there. And with that, I will hand the call over to Bob. Bob?

[Bob van Dijk:]

Thanks, Eoin, and thanks, everybody, for joining the call today. It's been another busy period for the Group and it's been a time when a lot has . So, the operating environment remains turbulent, but consumers continue to share more and more of their daily activities online. And we see that as really having a positive effect on our operations and investments. And it's really in periods like this that the best opportunities come out, and they present themselves to those with patience, with capital, and with conviction. And that's what we do here at Prosus. And that's why we invested in Tencent, 20 years ago, and this is why over the past eight years we've built a portfolio of the fastest-growing assets in classifieds, payments, food delivery, and Edtech globally. Our ecommerce portfolio will be worth roughly $54 billion after approval of the BillDesk transaction, and our core segments are operating at scale, and are still growing significantly in value. And we really have momentum that will propel future growth and value creation. So, today, I will walk you through the drivers of current and future growth, as well as the investments that we are making to fund that growth. And after that, we'll open the lines and take all your questions. So, let's start on slide five, that shows our strategy, which is aimed to build businesses with sustainable growth potential. And we do this by identifying great products that are managed by excellent teams in high-growth markets, that are addressing key societal or consumer needs. And we do that by building online platforms. And operating at this intersection has driven tremendous value creation for the Group over the last few years. And if you look at slide six, you can see the pace at which this value has been created and, importantly, the impact that scale is having on value creation. And so, in the first-half of the year, our ecommerce portfolio grew revenue 53% year-on-year organically. And this has driven substantial value appreciation. So, excluding Tencent, we are currently generating a 22% IRR on the $22 billion we have invested over the last decade. And actually, if you look at the IRRs of our most recent investments, primarily in food and in Edtech, they are considerably higher than the 22%. So, at the current course and speed, our non-Tencent ecommerce portfolio is on track to exceed $100 billion in the next few years, and can meaningfully expand beyond that after. So, I'm confident that investing across our portfolio will create strong returns for our shareholders. And today, if you own shares of Naspers and Prosus, you own, as you can see on slide seven, a really fast-growing unique portfolio of unique consumer internet companies. And most of these are not yet accessible to public market investors. And after the approval of BillDesk, three out of our four segments are worth more than $10 billion, and are growing strongly. And our fourth, which is Edtech, has a clear path to the same. And so, if we take a step back, that makes each of our segments bigger than 90% of all publicly listed internet companies. And I am committed to ensure that this value is realized over time. So, that's really how we think about things from a top-down perspective. And now, let's turn to slide eight and get to the key highlights of what's really been a very strong six months. So, first, as I mentioned, ecommerce revenue growth accelerated to 53% year-on-year. And we've now grown more than 100% over the last two years. And our operations and investments are scaling and are growing significantly in value. Second, this growth is underpinned by ongoing expansion of our businesses' ecosystems. And as an example, there's auto transactions in classified, and there is convenience and food delivery, which will extend that growth of these segments well into the future. Third, we've also invested in new and exciting assets, and made more than 40 investments during the period. So, BillDesk and Stack Overflow are just two of them. And these investments will position the Group well for continued growth. And fourth, we funded our investments with ongoing improvements in profitability at our core operations, which is a very important point. And that has also enabled us to efficiently access the debt capital markets through the issuance of $4 billion worth of bonds at very attractive rates. And finally, we're making massive progress in our sustainability efforts at the Group, and I look forward to speaking about that more shortly. So, let's dig a little deeper in each of our operating segments, and I'll start with Classifieds, on slide nine. So, after a pretty turbulent 2021, OLX rebounded very strongly, with more than 200% growth at OLX Autos, and 48% growth in core classifieds. And growth in core classifieds was driven, to a good extent, by outstanding performance from Avito, in Russian, which generated 67% revenue growth at higher operating margins. So, in Brazil, Group was up, it's now fully integrated in the business, and this strengthened our property vertical, and it's contributed to OLX Brazil's 40% organic revenue growth. On the left-hand side of the slide, you can see how OLX's growth compares to the peer group. We're very pleased to see that our performance is well ahead of the industry average. And we see significant further opportunity to build out a full-service auto transaction business through OLX Autos. And while it's still somewhat early, you can see from the right-hand side of the slide, we really making good progress. We've grown the business quickly, and we just surpassed $1 billion in total car transactions. And we are, in terms of numbers of cars sold actually comparing already quite well to some of the public companies that are operating in the same space, and all these companies have very significant valuations. Then let's move to Food Delivery, and you'll see there, we're following a similar path to Classifieds. So, we are delivering strong growth of a scaled core, but at the same time we are expanding the business through adjacent product offerings. And I think slide 10 illustrates that well. So, during the period, orders grew 70% year-on-year, and besides the major step-up in scale achieved last year, we've increased our investments in things like grocery and convenience to capture the broader delivery opportunity beyond food. And iFood continues to grow from strength to strength, with consistently strong growth, as you can see on the left-hand slide of slide 10. So, over the last year, iFood added more than 60,000 restaurants on to its platform, that's another 20% up from last year, and that was already on top of the very, very strong growth path in restaurant adding. So, that growth was made possible by iFood developing its own delivery business from, basically, nothing in 2018, to 36% of orders today. And that's exceptional, given that the marketplace business, which is sort of the delivery is also growing strongly. And iFood's first-party business is now actually bigger than all of its other competitors in the markets combined. And that's actually a great example of our metric-based investing, and is the same approach we're now taking in building out the additional offerings in convenience and grocery. So, still early days there, but as you can see from the right-hand side of the slide, the signs are very positive. And the revenues from adjacencies in iFood is growing three-fold in a very short period of time. And for me, it's a demonstration that the opportunity in this space has expanded significantly. And we are -- you are seeing an increased investment in iFood, Swiggy, and Delivery Hero, and that is a reflection of that conviction in increased opportunity. So, if I can move on to PayU, on slide 11, and again, here you see the same theme of strong growth at the core, while we are investing to expand the opportunity set from here. So, in the period, the core PSP business grew an impressive 48% year-on-year, with growth actually coming from all markets, and it's benefiting from increased ecommerce transaction activity everywhere in the world. So, when to build that transaction is approved, then you will move sort of from the middle of the pack and large payments providers to be a top 10 global payment provider. And the combined TPV of the business will be well over $100 billion, and it will process more than four billion transactions and nearly, and we'll have more than 300 million transactive customers. And that actually includes the vast majority of customers that are trading and transacting online in India today. And with that level of scale, the combination we'll create a platform with a broad product offering and also significant potential for growth in digital banking. On a separate note, there's been another important value creation story in Bayut, I know is the IPO of Remitly that happened in September. We invested about $200 million in Remitly some four years ago. And based on its market cap at the end of September or stake is worth $1.7 billion into the buys, the 7x return so far. And it's a great business that we're excited to be in. So, let's now turn to our newest segment, which is Edtech on slide 12. So, far, we've deployed $3.5 billion in nine exceptional businesses that will have high potential. And we see them scaling rapidly, both in usage, but also in value. When we think about it stage, we tend to think about it in two main verticals and one inside there's the enterprise and vocational space, and on the other side, there's K through 12, and you can see that on the left-hand side of the slide and we are investing in both. So, in enterprise and vocational, we know that employers today need to provide continuous education opportunities for their employees in order for these companies to remain competitive. And at the same time and for each need the ability to constantly up skill while they're on the job to remain relevant. So, we're investing in the platforms and products that address those needs. And we are building enterprise solutions on a global scale. It's been a busy six months in Edtech. Skillsoft went public, and actually reported a strong first set of results as a public company that we're very proud of. And in June, we closed the acquisition of Stack Overflow, which is a phenomenal platform that's growing very quickly. As you probably know, Stack is core resource for most software engineers around the world. And it serves more than 100 million developers and technologists every single month. And it's one of the 50 most used websites in the world. So, if you step back from it, our portfolio now reaches 90% of the Fortune 100 across our corporate learning companies. And that includes Skillsoft, Udemy, and Codecademy. And there is significant opportunity to drive future growth through these relationships that we have. And actually, we have a similarly exciting presence in K-12 through BYJU'S and Brainly. And there we're really investing in the mechanization of the classroom. So, we're enabling students to gain access to alternative forms of learning that augment the core curriculum. And as a group, you should expect us to look for additional opportunities from the Edtech space. So, while we're scanning e-commerce rapidly, and I hope what I just told you on the line stats, I also want to underline the groups could be commitment to our longest standing investment, which is Tencent. So, Tencent is a phenomenal business, and it's also an investment with tremendous upside potential. Unlike slide 13 shows this, and here's why. So, first, China will become the world's largest economy and the growth that's underpinned by population of 750 middle and upper income customers. And over the next decade, close to 1 billion people will be living in cities and they will be using smart technologies in every aspect of their daily lives. Second, I believe China is the world's most attractive internet market with over 1 billion mobile internet users. Next to the level of engagement of those users is well ahead of those in the west. Tend to put, if you want to be a large consumer internet investor at a global scale, you have to be deeply invested in China and against this very supportive backdrop. I'm convinced that Tencent is best positioned to take advantage of all of this. And there are four key drivers, which underpin our conviction in Tencent. So, first, Tencent is led by a world-class leadership team and as a proven track record of operating to all types of environments to the benefit of all stake holders. Second, Tencent continuously evolves and innovative ecosystems in a profound way. Third, Tencent is the market leader in the score segments, and it is investing and innovating to keep those positions. And finally, Tencent is also one of the most active and successful investors globally. It has 1,400 industry companies invested, close to $100 billion in the deployed capital and we don't believe that those assets are appropriately valued by the market, and therefore it represents a significant upside to our investment case. So, now, I told you a few things about our strategy and about value creation, hope you're excited about that, too. Now, on slide 14, I would like to spend a moment on our approach to capital allocation, which over the years has remained focused, has been disciplined and has been balanced. So, in the center of the slide, you can see that as a group, we've generated and raised approximately $44 billion over the last six years, and that's been through a combination of asset disposals and capital raises in the debt markets. And we have deployed 60% of these funds into extending our core four segments. And these all have tremendous potential. And as you've seen, in the past few slides have grown tremendously over time, we achieve an impressive 22% IRR on doing this, and that excludes Tencent. And as I mentioned earlier, actually our return has accelerated of late driven by food and Edtech investments. And finally, and importantly, while we have deployed roughly two-thirds of our capital to investing for future growth, we have returned roughly one-third of that $44 billion to our shareholders over this period as well. And finally, when we turn to slide 15, I would like to emphasize the progress we've made in our sustainability efforts across the group. And I would also like to say a few words on how we apply our influence across the group to controlled and non-controlled businesses when it comes to comes to ESG. So, at a group level, what we do is we set the standards and the principles which we then actively cascade across our majority control businesses and we work closely with them to focus on areas specific to their business model. With our minority businesses, we share our principles, and we demonstrate best practice and we amplify that to our board seats, and through operational engagement. Now, we recently joined the UN Global Compact, and we're really pleased that our efforts are being recognized externally with Prosus achieving an inaugural score of 73 out of 100 on the Dutch Transparency Benchmark, and that actually puts us already in the Top 40 of the benchmark. In the meantime, also acknowledged for efforts was an approved 2021 Low Risk ESG rating which again is a great confirmation of the progress. Finally, just a week ago, we received the Prosus Annual Scores on the Annual S&P Assessment, and we are happy to see a 69% jump in Prosus score and a 52% increase in the NASPO score. And importantly, this improvement actually qualifies Prosus to be included in the Dow Jones Sustainability Europe index, which we're very proud of. So, I think we should be excited about this progress. There is however, a lot more that's planned here. And our priorities for the coming month include setting emission reduction targets, and also articulating in full our responsible investment thesis which we are looking forward to sharing with all of you. So, with that, I would like to turn the call over to Basil. Basil, can you take us from here?

[Basil Sgourdos:]

Thank you, Bob. Hello, everyone. And thanks for joining us, and I hope you're all doing well. So, I can hear from Bob that it has been a busy day for the group and I'm happy to be speaking with you today to discuss another set of strong results, where as Bob mentioned, our businesses continue to build the strong momentum and scale that they achieved last year. Group revenues grew 29% to $16.6 billion for the six months. And importantly, our e-commerce revenues grew even faster and accelerate a few percentage points to deliver a very strong growth of 53% year-on-year. Group trading profit grew 8% to $2.9 billion. As we took advantage of the businesses operation momentum, and the growth in our more established businesses profits to invest in future growth, which I'll expand on later. Painting delivered strong results and remains well positioned with our share of its revenues reflecting as growth in revenue up 23% year-on-year and 13% in trading profit. Core in line earnings per share grew 7% year-on-year, this was driven by larger contribution from painting and this despite our sale of a 2% holding in during the period. That does of course partially offset by the investments in the fast growing new opportunities, we identifying the e-commerce portfolio. Finally, this was another six months of positive cash flow, good contributions both from our core profitable businesses and from pension earnings. Our balance sheet remains very strong, which provides us the sufficient flexibility to pursue our strategy. Now, please turn to slide 18 and really talk about the e-commerce revenues that have accelerated by two percentage points, impressive 53% which means that over the past few years, the underlying revenues of this portfolio have more than doubled, which has led to the value expansion Bob highlighted. So, for the period, we saw growth across all our segments, adding further scale, and generating $4.2 billion of e-commerce revenues. Classifieds performed particularly well with the Ehrlich's Group growing revenues in excess of 100% to $1.3 billion. The business is emerging from the pandemic stronger with healthy growth at its core, driven by playing a large role in the transaction space. Food delivery contributed a similar amount of revenue to test out at $1.3 billion and despite letting an exceptional year of growth last year, growth this year remained very strong at 86%. Our payments in FinTech segment accelerate its growth too to 44% with Indian paints business up 50% year-on-year, and the GPO business at 27%. PayU remain positioned very well to benefit from the continued global shift to digital payments in all of its markets. The past 18 months have been a real turning point for Edtech and we reflect this by highlighting its financial performance and reporting it for the first time as a separate segment. For the period, our new Apex segment grew 51% to $120 million. However, I'd like to point out that this is not a true reflection of the segment size, triple businesses we're only consolidated halfway through the period. On a pro forma basis, revenues would have exceeded $200 million in the half year. Bob has highlighted why we're so excited about the space, and you should expect to see continued investment in it. And finally, eMAG grew 4% to generate a $1 billion in revenue for the first six months. This is notable given exceptional performance last year off the strong boost from the COVID 19 pandemic, eMAG get delivered close to 60% top line growth in the last 18 months. Now let's spend a minute dissecting the margin trends across a portfolio on slide 19. During the period working on the strong momentum and consumer adoption across our businesses, we stepped up our investment in each of our segments to build up additional products, services and offerings. We believe this will expand the opportunity set and drive future growth and significant value creation across the portfolio. As a result during the period, our e-com training office increased to $372 million. But importantly, operating margins remained flat, reflecting improved profitability at the core of our classifieds, food delivery and Payments & Fintech segments. Edtech margins of course decreased as we stepped up investment, given that this is a segment in an early stage of development, and there is a significant opportunity ahead. The stepped up investment in Edtech is most visible in Byju's and Stack Overflow. We invested across the portfolio in the period. Specifically, we're expanding our pay and chip offerings, and also transactions in classifieds and our credit and digital banking offerings in Payments & Fintech. In food delivery, we are moving into convenience and groceries, will also be seen similar convenience and food delivery opportunities in Romania through eMAG. Finally, as Bob already mentioned, we significantly expanded our Edtech portfolio during the period adding Skillsoft, Stack Overflow, and GoodHabitz. With earlier results of this increased investment coming back very positive, we are excited to be able to invest further and ramp up the opportunities we see ahead which will mean increased investment for the rest of the year. Now let's dive a little deeper into our core segments and we'll start with Classifieds, just had a strong rebound from a very difficult year last year. This is shown clearly on slide 20. So, classified revenues more than doubled to $1.3 billion and the trading profit close to $108 million from just $29 million in the prior period. Earnings is revolving to meet the rapidly changing environment, it has demonstrated remarkable resilience, it's strengthening market positions by accelerating new consumer openings such as pay-and-ship services. Scanning its open cause action businesses where it also offers financing and increasing customer safety across its platform. In the quarter FY business, revenues increase 48% driven by Russia, Europe, and Brazil with massive paying leases reaching $4.2 million. Our leases are the $300 million active leases. The profits more than doubled to $165 million. Our research delivered another excellent performance, revenue 67% at a 48% margin, at a 38% margin which is in fact stronger than previously reported, driven by strong momentum across all verticals resulting from good market demand, increased traffic, and investment in new product offerings. Similarly, in Europe, we reported strong top line growth of 37%. So, good growth in products and services, and we gained traction in the auto segment, this is despite still being affected by supply constraints. We've set up investment which will really impact markets. Trading profit margins remain healthy despite this increased investment at 28% which is our 50% joint venture with added winter. Net revenue is 40% with a 22% trading profit margin, which continues to improve. We successfully integrated Group results and realize both revenue and cost synergies. Over next quarters, which represent all our control businesses outside Russia, Europe, and Brazil, we covered shortly from attack period last year, as many of its inspection centers were closed due to lockdowns. OLX workers almost tripled its revenue to $605 million in reported trading loss of $57 million, with margins improving significantly by 16 percentage points to a negative 9% margin. We're of course delighted with the performance of the team and the business during the period that once we point out that growth will remain strong in the second-half of the year, but it will slow versus the first-half. As OLX is mostly impacted by COVID-19 in the first-half of last year and started to recover in the second-half. Additionally, from an expense perspective, I remind you that the second-half of the year is traditional when OLX grows faster and invest in marketing during the major holidays. So, we should expect increased investment also in OLX Autos to both further scale and momentum gain into the new year. So, let's turn to the delivering on slide 21. You can see a healthy 6% pinch point improvement in the trading margins versus the prior year, driven by the approved profitability in the core of the food delivery business. As our markets start to normalize in COVID growth rates remain strong. This is very encouraging given the growth and scale achieved last year. For the six months GMV grew 73% driven by 7% order growth leading to 86% growth in revenues. Trading losses rose to $300,000 protecting the new investment in convenience and groceries as well as some high customer acquisition costs, as our markets normalized with COVID-19 restrictions largely being lifted. As Bob said, it continues to fire on all cylinders, but orders growing 44% to more than $300 million plus linking to revenues of $464 million absolutely 8% year-on-year offer very large revenue base already. I feel it's uniquely positioned to capitalize on the grocery, delivery trend and is rolling out its grocery delivery service across the country. The size of course, yes to a trading losses increasing to $100 million. For the core food delivery business is very close to breakeven. In the second-half of the year, we are going to increase the pace of investment in the grocery delivery business. Similarly, Delivery Hero again recorded strong organic growth in its first six months of it's financial year. Our share of Delivery Hero's service revenues grew 158%, $703 million. Just over half of the food delivery segment losses come from Delivery Hero. The losses increased $60 million at Delivery Hero also invests in quick cars and other exciting opportunities. Moving to India, where Swiggy is recovering strongly from the pandemic, the business is reactivating users and it's increasing multifrequency. Revenues grew 56% driven by healthy demand and expansion of the grocery business through Instamart and SuprDaily. The rate of growth has further accelerated in recent months. Swiggy's core food delivery business is very close to profitability. Swiggy is well funded and will invest in product and technology to continue building and expanding its ecosystem, particularly in groceries and convenience, which are final opportunities in the market. So, moving on to payments in particular slide 22, where we continue to see a shift to digital payments across our markets. PayU through revenues 44% of $359 million and trading losses remain flat as the core PFT business improved it's profit margins by 3 percentage, points, which of course help define the new investment into our credit business. Our largest markets India and they do their transactions by 53%. And India now accounts for over 30% of the volumes Prosus. It's lengthened to almost $19 billion worth of total payment value. The combination of OLX and PayU will significantly accelerate our progress and our offerings to consumers and businesses. Outside of India, our business maintains this good trajectory. Despite a higher revenue base, PTV grew 29% to $16 billion supported by 39% increase for the number of transactions. So, following the acquisition of 2019, Turkey is not the largest revenue contributor to GPO, one of the fastest growing markets. As you know in credit, we did scale back at the start of the pandemic to mitigate the risks. But we're not talking to expand to scale this opportunity. We remain optimistic about the Indian credit opportunity as we brought new products such as checkout finance, that scales our loan book. Total disposals for the period were $175 million. That's a whole hold and we expect further acceleration issuances in the second-half of the year. So, first getting after the slide 23, where our newest core segment Edtech is benefiting from a generational tailwind of technology innovation and continued increase willingness by consumers and companies to pay for Edtech product. With the pandemic restrictions eased in many parts of the world. This segment predicts revenues by 51%, with all businesses contributing to this growth. During the period, we closed the acquisition of Stack Overflow and GoodHabitz in July. And have consolidated two months of their results, then for these businesses together with inclusion of Skillsoft from October one this year will become more info to the segment Yes, training losses increased to $48 million, but has driven off the new entrance to a portfolio and of course continued investments to accelerate growth and capture the size of the opportunity ahead. And this is quite limited in companies like Byju's that is expanding its operations into a global footprint. Slide 24 is a very important slide as we unpack the increase contribution to the central cash flows by our profitable internet businesses. This illustrates the cash flow generation to the center. Consolidated trading profit from these businesses increased 44% year-over-year, driven by Classifieds and payments in Fintech with governance forecast spikes totaling $154 million during the six months, mainly coming from a detail in OLX Europe. So, next slide 25, free cash flow for the six months was an inflow of $180 million compared to $370 million in the prior year. Tencent remains a meaningful contributor to our cash flow by a stable and increasing dividend stream. Pension grew 25% to sizeable $571 million. Cash from operating activities and working capital decreased to reflective advancements in the new opportunities across our fingers. I keep quote if you note that from a cash flow perspective, training the office from associates, such as Delivery Hero and Swiggy does not impact cash flow. This losses incurred these investments related by these companies. Working capital investment increased as for the sale season, and classified as these scale its autos business stock-based compensation, by people have created tremendous value, which is reflected in the significant e-commerce valuation you've heard about today. CapEx has increased as we invested to expand the next warehouses capabilities and lock our rollout. Our taxes paid have also increased as possible in our core tax units group. So, maybe turn to slide 26, you can see that this has been a very active season of M&A, particularly in Edtech, food delivery, and in payments. Year-to-date, in full-year '22, we've invested $5.2 billion in the first-half and it was committed $4.7 billion for the acquisition of BillDesk, which of course, we started to regulate the approval and make those by the end of the year or early next year. As Bob mentioned earlier, the IRRs on our most recent investments have been even the high end in the average, and we are confident the investment we've made that far this year will create significant value for the group and our shareholders over time. We'll continue to look for more opportunity. Well, those, if it's unlikely that the talking them into we had in the first six months will be sustained in the second-half of the year. We remember that our historical average run rate point for M&A has been about $3 billion per year. With that next move to the balance sheet on slide 27, we've made great progress over the last few years, increasing our financial flexibility. With Edtech taken advantage of the loan processing environment to step up our leverage profile and lengthen maturities, this provides the necessary funding to put to our objectives. While we strengthen our balance sheet, we've also been actively deploying the capital. We have gross cash of $13.6 billion at the end of September and made cash of just about $3 billion. Cash balance will be reduced on closing to the BillDesk transaction and the close off of our current $5 billion buyback program. we expect our next position could turn to a net debt position. We continue to work hard to increase our financial flexibility, and it's always go to remain disciplined and focused as we allocate our capital. So, focusing, closing, and in summary, we're very pleased with the significant progress over the past six months and our positions as we enter the second-half of the year. Prosus core segments make good progress against financial and strategic objectives. Our priority for the rest of the year, smiling profitability at the call, establishing current segments, while at the same time providing investment required by each of the segments to pursue the substantial growth opportunities we see ahead, ability to remain strong and liquid. We'll continue to look for M&A with progress our strategic ambitions. It is precisely the strategy that has led to the substantial value creation we've reported today. And I'm convinced it will deliver similar value accretion over time. So, with that, folks, I'll hand back to Bob to go through our thoughts on the future.

[Bob van Dijk:]

Yes, thanks, Basil. And before we open questions, I'll just take us through slide 29 to talk us through our key priority. So, first, I think you've seen from the numbers reported today. The fundamentals of our business are fairly strong and are in fact strengthening. And our focus will remain on building bigger businesses by expanding our opportunity set from here. And second, we will continue to drive profitability at the core of our segments while we're at the same time investing to extend our ecosystems on the platforms. And third, we remain very strong believers in Tencent's growth prospects, and we are investors for the long-term. Fourth, as growth continues to come through, we will build on our progress by continuing to bolster financial flexibility through additional debt. And fifth, as we deploy capital we will remain disciplined, and focused, and generating returns. And we aim to generate strong risk-adjusted returns north of 20%. So, with that, this is where the presentation part of the meeting stops, and we open up the lines for questions that you may have, and I think Chris will take us through that.

[Operator:]

Thank you very much, sir. The first question is from Cesar Tiron of Bank of America Securities. Please go ahead.

[Cesar Tiron:]

Hi, everyone. Thanks for the call, and thanks for the Q&A session. I have three questions, if that's okay. The first one for Bob maybe, relating to the $100 billion extension NAV by 2025, can you please help us visualize better how this NAV will look like? Do you see any verticals that will probably be larger than others? Will all these verticals be fully owned by Prosus or -- and maybe some of them would be listed by then. And also how much investment do you think you need to make it $100 billion? Is that $10 billion to $15 billion or is that more? Thank you so much. The second question really relates to the food delivery profitability. Can you please help us better understand the near-term dynamics of food delivery for stability, as I think you mentioned in the release that iFood core is close to profitability. And that, of course, e-groceries require more investments. And we've also seen GMV gross ahead of revenue gross at iFood, for example, in the past six months. And then last question would be to better understand what has caused the slower revenue growth at eMAG besides, obviously, the very tough comps with last year, given the lockdowns. Thank you so much.

[Bob van Dijk:]

Yes, thanks, Cesar. And I answer your third question, and then your first question. And then I'll ask Larry to talk to the food delivery profitability prospects. So, on eMAG, I would say it's still -- and if you look at the two-year growth path, it's still an absolutely phenomenal jump in activity. And really, that business has gone from strength to strength, and it remains on a positive trajectory, which is quite remarkable, if you think we're lapping, indeed, a period last year where people were basically locked up, and in many cases was the only way for people to buy products for their family is to order them online. So, what we've done is looked quite carefully at whether eMAG has sort of compared to the overall online ecosystem, and maintain momentum. And to that, the answer is a resounding yes. So, eMAG is continuing to actually grow faster than ecommerce as a whole, but they are just lapping an absolutely outstanding performance a year ago. So, that's really all there is to that. So, that was your third question. First question is how do we get to the $100 billion, which verticals? I think, look, it's hard to predict the future in detail. But I think you'll see that the current core for verticals make up the bulk of that where, based on current growth rate, I think food will be a very large part, but classifieds will be as well, because not only are we seeing strong momentum in the core, but we're also seeing that in auto transactions in particular, which could just be another OLX in a few years. We actually don't see we need a very large amount of additional investment in there. Yes, there will be, but we're not talking in the many , but actually this is a more organic development from where we are today. And, look, we will see, right, to what extent these will be fully owned and partially owned, and in food and in Edtech, obviously, we are already in a situation where we have partial ownership. And I think in that, a few years horizon, we could see some of our core segments actually go to market in an IPO. I think that covers the key components of your questions there. And here, I can hand over to Larry for profitability in food delivery.

[Larry Illg:]

Yes, happy to take that one. So, yes, after the -- over the last 18-24 months of the pandemic, food delivery businesses around the world have trended closer to profitability. And it's really just a function of unit economics improving with increased volume and a significantly diminished need for consumer spend. And our businesses are no different there. iFood was profitable in a few months during that period, as it really didn't need to spend on customer acquisition. But at the same time, in order to continue to fuel future growth, specifically in grocery and convenience, I think those sectors really emerged during the pandemic. We invested behind that growth. The potential of those, so big, the so big, it made sense to put more capital behind our food businesses despite the fact that the core businesses returning towards profitability.

[Cesar Tiron:]

Thank you so much, Larry and Bob, very clear and helpful. Thank you.

[Operator:]

Thank you. The next question is from Will Packer of Exane BNP Paribas. Please go ahead.

[Will Packer:]

Hi, Bob and Basil, many thanks for taking my questions. Three for me, please. Firstly, we're now a year into the Chinese authorities overhaul, which has materially impacted Tencent. You own that stake structure. Is there any other you could share on the authorities' perspectives on this ownership vehicle as the environment has shifted? Secondly, the discount in NAV has remained stubbornly high despite your recent efforts, including buybacks and the exchange offer. Could you two talk from some of the options to help reduce the discount in the next 12 months, what are you thinking through? And then finally, you've been ramping up pay and ship across your generous portfolio. Could you share with us some progress on those products and how to think about the long-term potential, for example, attachments rates you're achieving or what level of are possible? Thank you.

[Bob van Dijk:]

Yes, thanks, Will, for those questions. And the first question, I think, Charles, you can probably from your position best answer. Obviously, I have a few things to say about it too, but I think I'll ask Charles to go first. And I can say a bit more about the second, which is the discount in NAV, and I'm sure Basil can add. And around pay and ship, I think our relatively new leader for our Classifieds group is there. And maybe I can ask him to answer that. But maybe, Charles, you want to go first, and say a few words about ?

[Charles Searle:]

Yes, so, thanks very much, Bob. And, Will, as you know, there's been a lot of regulatory developments in China over the last six months or so. Much of this sort of focused entirely around industry behavior, the -- and and data privacy, certain social issues that were coming through within the economy. And those regulations have been sort of having their effects, and the business generally adjusting to it. And I think creating a much healthier environment in terms of the internet within China. But more specifically in relation to VIE, there has been no developments, actually, during the period that has been focused on VIE and VIE structures so specifically. As you know, those structures have been around for a very long time, has worked well, continue to work well. And continue to be endorsed by senior members within both -- both within the regulatory authorities . So, we see very little change, or in fact nothing in that respect of having any impact on our current operations at all.

[Bob van Dijk:]

Thanks, Charles. And then I can talk a little bit to the share exchange and the discount to NAV. And the share exchange was a really essential step forward to bring the size of the two more in line with the markets they operate in. But it's not something to be seen in isolation a number of other things over time. And actually we are currently in the process of a very large buyback. I think when we did the share exchange. It was pretty much coinciding with a fair amount of regulatory uncertainty in China. And actually Tencent got significantly affected by that. And we've seen a lot of volatility in the market since I think investors are cautious. And I think that has had an impact, right. And I think we've seen our buyback being executed for now a fair amount of distance along the way. We've also seen some switch back from Prosus shareholders back into Naspers that we expect it, and that's exactly why we designed the buyback in this case. So, I think over time the benefits from the share exchange will come through, I think it is the right solution. And then from there, we think although the situation is stable, there will be further opportunities to improve, I think most importantly, what we need to do is to continue to show exceptional results as we've done today right with growth in e-commerce improved in the core of the profitable businesses, as well as increased disclosure, I think we'll get there over time. And maybe, on that you want to talk briefly about our additions and shift and the adoption rates we're starting to see.

[Basil Sgourdos:]

Absolutely essential, Bob, and so, it is a strong focus for us in Classifieds, I think one of the very important way to move towards the transaction of our customers. In the last six months, we've really accelerated rollout of our products and services, increasing both payment and delivery coverage to reach more customers and enable more transaction on the platform, I will not comment on the attachment rate because it's still very early stage. I think there are a couple of benchmarks available in the industry that I refer people to. But the short thing about them is we're seeing two things First, a unique opportunity to monetize our consumer audience, especially on our original platform, which previously was not entirely monetized, so, great opportunity for future revenue growth. The second thing is that what we've seen the different experiments we've done around Fanship and the way we're going to monetize it has been a very strong adoption. So, very early positive sign that maybe too early to be more definitive about.

[Will Packer:]

Thank you very much.

[Operator:]

Thank you. The next question is from Lisa Yang of Goldman Sachs. Please go ahead.

[Lisa Yang:]

I have three questions as well. The first one is for Basil, you mentioned a few times, there couldn't be more investments in the second-half of the year to obviously drive this exceptional growth momentum, can you maybe help us understand where you're in the sort of investment cycle into this new growth expansion to do see the H2 win rate rather as a peak or something that we should also expect for FY '23 and onward, since there will be very helpful as a first question. The second question is on OLX, you disclosed that B2C has reached 20% of transactions in the markets where it is pretty, could you maybe share a bit more color in terms of whether your clients regarding B2C in terms of rolling out into other markets, and which are the markets where that functionality is there today? And the third one is on Avito, there's been some press reports about an attempt to buy , are you delivering property vertical in Russia, which was a block by the regulator? So I guess two questions related to that. One is what does it mean for your approach to growth in Russia? Is it going to be organic where you can go there, and in treaties and across the rest of the contract portfolio, local traditional opportunities? Thank you.

[Bob van Dijk:]

Yes, thanks Lisa for those questions, and I think Basil can answer indeed the first. The first one, I think Laurent can answer the second one about OLX autos and actually I can answer the third one because we don't really comment on M&A either future potential or maybe in the past that didn't work out. So, there's not much to be said about that I can tell you about Russia I think actually the numbers do the talking on Russia, where we saw organic growth of 67%. So, that business is in exceptional shape. And it's actually performing really well across the verticals. And we're quite proud of that. In the other parts of the market as well again, we don't tend to speculate on future M&A. But the organic momentum is really strong and that really is our priority at this point in time. But maybe Basil you can comment on the investment cycle where we are and Laurent on OLX Autos B2C rollout.

[Basil Sgourdos:]

Thanks, Bob. Hi, Lisa. Thanks for the question. Look, I'll make a couple of points. First of all, you'll know that we don't give guidance, and that hasn't changed. And there's lots of reasons for it, not because we're trying to be cagey and not transparent. It's really because we're a global business. We operate in 100 countries, we have a number of new opportunities, some of them are very sizable. And the level of investment is going to really be driven by the pace of success. Bob spoke earlier about metrics based investment. That's what we do. So, if the opportunity is big, we think that go well and we're seeing the unit economics turn out well, we're going to step up investment, in fact more investment for full-year '23. And the key thing needs to be that we can deliver great value and a great return to shareholders and build new sizeable businesses. Overall, it's also important to note that our preferred businesses are also growing fast, both of the top line and bottom line. So, in time, they'll continue to scale and now have an offset of that increased investment. So, it's hard to tell you whether full-year '23 is the peak or full-year '23 is the peak and because I don't know it's really driven by how well we execute on that. But based on what we see so far, we've been really well. And this is why we encourage to pick up investment in the second-half of the year.

[Romain Voog:]

To answer the question on OLX Auto and our moves toward B2C business to consumer, our move to B2C as you might recall, when we did the acquisition of SVG, it was 100% what we call consumer to business, industry or business, right, so we are basically buying cars to consumers and selling them to dealers through an auction mechanism. And while this is still very important part of our business, we have taken the strategic decision to move toward building our B2C mix. And that allows couple of things. First, it really helps us provide a differentiated experience to consumers. This is what is available right now in the industry when they go through an offline dealer. Secondly, it will allow us to capture more of value created through car transaction because we both have the value of buying the car but also reselling the car. And more importantly, as you can also see in multiple examples in the industry today, it will allow us to upsell loans, car loans in particular, but also things such as additional insurance and offer. So, our move to B2C is quite important for us to be able to build a consumer brand, own the customer and make sure we deliver a business which is not only sizable that provide the right customer expense at the right type of economics for shareholders. To your question about how we are running out in our market, if you look at our market today, we have already initiated the move toward B2C in most of our markets, when it for the most relevant the most penetrated of all being Indonesia, which is a market where we have an opportunity to move a little quicker.

[Operator:]

Thank you very much. The next question is from Miriam Adisa of Morgan Stanley. Please go ahead.

[Miriam Adisa:]

Good afternoon. Three for me, please. Firstly, just on the sort of portfolio structure and just wondering how you're thinking through the number of listed assets in your portfolio. Over time, do you envisage having more concentrated stakes and a few listed assets or having smaller stakes and lots of liquid assets across your kind of four key verticals? Just thinking about sort of the complexity of the portfolio and how you sort of envisioned that over time. And secondly, on Edtech if you could just give a bit more detail about specifically where you're investing the key cost lines and when you think the scale benefits will start to come through. And then, thirdly, just on iFood and grocery, just wondering especially about the other adjacencies beyond grocery that you're interested in exploring for iFood. And then also just generally given the amount of funding that we've seen in grocery and the fact we're starting to see some consolidation in on demand grocery, how active should we expect that you want to be in that? Thank you.

[Bob van Dijk:]

Okay, ma'am. Thank you. And I will say the first question around the listed assets. I think Larry, even though I think, we can, several of us can talk to it, but it's best place to talk about where we are investing in Edtech primarily. And also, I think, Larry can talk first about the investments beyond grocery that are happening at iFood. So, in terms of the portfolio of listed assets, I think the key criterion for us is the expected return and the quality of the theme that we're invested in and our ability to have a view on value-added therapy on just being a shareholder. I think that's been the case for our listed assets over time, and I think that will stay the same. I think we have been able; I think to manage well active positions there. So, for us, it's not so much about the size, but it's our ability to make sure that it strategically fits. We believe in the financial upside and we have something to add. It's really those two things that will drive that portfolio over time. If we think it doesn't take those boxes, we will do something with the stake, and then, maybe over to Larry for the Edtech and the iFood question.

[Larry Illg:]

Yes, so on EdTech and where we're investing, I think during the pandemic, we've seen an acceleration of consumer activity on the K to 12 side, but really where we've focused our investing attention has been on the vocational enterprise side. And now these businesses, in many ways have been hiding in plain sight over the course of the past decade. But really have finally gotten some visibility, not just from us, but from investors around the world. So, we've been investing on both sides, and I think certainly I expect to continue to explore opportunities in both. And I think there was a second part of that question of when to do the scale benefits kick in? And we're certainly seeing it on both the vocational and the K to 12 side. On the vocational side, just the scale at which the companies are able to sell into large enterprises as the products mature and the sales engines mature, we're seeing operating leverage within the companies and on the K to 12 side. In many cases, these are consumer businesses with classic network effects dynamics. So, as the networks they have a Brainly or a BYJU'S grow. We see increased leverage there. Shifting gears over to food, you asked about the other adjacencies with an iFood and it's important to note within food delivery that while the core of these businesses started as you know, restaurant food delivery, often the adjacencies are and that's true globally, often the adjacencies are much more local. So, in the case of iFood, we've seen real opportunity in Fintech, and this means, you know, facilitating you know, financial services to our small merchants, our restaurant partners, and have also been looking at meal vouchers and addressing other meal occasions for our consumers in addition to grocery and convenience, it's more of a global opportunity. And separately asked about grocery consolidation, I think there's an important point there. You know, we saw grocery and convenience very early. And one of the benefits we have as a global investor is being able to see sectors as they emerge in the case of grocery convenience really saw it in the case of convenience emerging the Middle East and Southeast Asia, and were able to invest in that behind our existing food delivery platforms saved one direct investment in the space and I think even back then we signaled that we thought there would be some consolidation that would happen because there's some very natural synergies within the broader food delivery space.

[Operator:]

Thank you. The next question is from John Kim of UBS. Please go ahead.

[John Kim:]

Hi, everybody. Thanks for the opportunity. Two questions, please. If you look at your pace of investment, we're looking at kind of pro forma of $10 billion for this fiscal year versus an average of three or call it two plus the last 4 years. How comfortable are you with taking leverage at the corporate level to support an increased level of spend even if it's not 10 pro rata? And is there an opportunity to lever at the ? The reason I ask is if you look at valuations, they've been quite robust over the last 1 to 2 years. And given your style of investment, I would have to think that the valuations are putting pressure on how you can allocate a given pot of money. Any color there would be helpful. Thank you.

[Bob van Dijk:]

Yes, so let me take this John, I think the best investment has indeed been relatively high. And I think we've seen just and particularly in the case of BillDesk, right we have a very strong business in India focused primarily on merchants and e-commerce and we saw that business been sort of created from scratch and we created a tremendous amount of value there over the years, but we saw that huge synergies with BillDesk business, which is mainly in the bill payment space, so we then decided that is actually an opportunity that's too good to let go and create a top 10 payments company in the process. In terms of leverage, I think we see opportunities to further leverage at the top goal. I think, in particular cases, we could also think about leverage at the operational company level, but we see definitely that there's opportunity for value, for depth at the level. I think in terms of valuations, I think look the reality of things is, is that we've been extremely selective for many years, right? If you look at how we've invested, we typically invested in one out of 100 or several 100 opportunities that we've screened. And I think that has allowed us to create the kind of IRRs that we've created, like you don't get to 22% by being indiscriminate and even if you look at the last few years, right when I would argue that valuation levels have been quite significant in the last few years, we actually have seen our IRRs to be better in the last few years. And there were previously, so on our investments in food, and in Edtech, we've actually got an IRR, which are often an extra 30%. So, I think for us it's a -- the reason why we've seen that long term high returns is because we've been selective and also we've gotten better at understanding the businesses we're in which has allowed us to again to do better investments and create more enough in the Prosus, so you can expect us to continue to be selective, to continue to put the bar high and then when we see the opportunities we take them and if we don't, we don't and that is hard to predict, but the level of selectiveness is one that's consistent, and our commitment to driving great returns. This is the other piece of this consistent.

[Operator:]

Thank you, sir. The next question is from Andrew Ross of Barclays. Please go ahead.

[Andrew Ross:]

Great. Good afternoon, everyone. I've got three questions as well, if that's okay. First one is on OLX Autos. Can you just get a sense as to how the GPU or the gross margin is trending in our business both on B2B and B2C? Second question is our sponsor Laurent, is on the line, but it sounds like there are some pretty cool developments going on with digital banking, buy now pay later, et cetera in India, it would be helpful just to get a bit more color on how LazyPay and the Indian strategy is evolving, big picture. And then, third question is on food delivery and consolidation and clearly, a big deal the other day, we've Doordash in wallets procuress many learnings that you guys have on wallets as an investor in the asset and perhaps more interestingly, your latest thinking on food consolidation. And I think particularly we've been -- how you see valuations given, there appears to be a bit of a disconnect between what you see in a private space and in the public markets. Thank you.

[Bob van Dijk:]

Thanks, some big questions, Andrew. I'm going to ask Romain to comment a little bit on gross margins in Autos, but to manage your expectations those numbers are not numbers that we disclosed are quite directional. Laurent is on the line and he is very close to BNPL business, particularly what we're doing in India. So, I'm sure he can eloquently answer that. And on food delivery consolidation, again it's fairly broad questions with which are interesting that we could talk about it a lot. But maybe Larry wants to comment, and I maybe can add to that, maybe Romain, you can give a directional answer to Andrew's question.

[Romain Voog:]

Thank you, Bob. Absolutely. So, I'd say couple of things here first, we operate in very different markets. And so you should expect C2B and B2C margin or GPU to be quite different by market. As you might expect, both are driven by two main factors first, the price of the car. And secondly, the type of margin we're able to extract in C2B and in B2C and both of those are highly dependent on the market you're operating. One thing I might share is that when you look at C2B and B2C modeling, usually C2B be the large part of the margin and B2C is like 50% of B2C right in ratio. So, when you do C2B2C, you can see that you obviously do more margins. Finally, I'll address but if you look at the market today, you will see that given the shortage in new cars, the used car market has seen a lot of tailwind which have pushed for price increase and margin increase, so the GPU has developed very well. But we think there is a situational part of it, which might suffer in the second part of the year or the first part of the next year.

[Bob van Dijk:]

Thanks. Romain. Laurent, you want to talk about BNPL?

[Laurent Moal:]

Yes, absolutely. So, in India, we have two businesses. One is for payments and merchants that is PayU, second one is the one credit and the brand is LazyPay. So, we launched LazyPay as a pure buy-now-pay-later product a bit more than a couple of years ago. What we've been doing in the meantime, is first expand the product suites. So, from buy-now-pay-later actually to rebuilding and to personal loans. So, we have the full range of products. And what it means is basically we're able to give more credit lines, as we get to know more about the credit risk of consumers and expense basically our revenues, but also our profits. The second thing we've been able to do is expand also the distribution of a buy-now-pay-later products, we are leveraging the relationship that we have with our merchants on the payments side, actually to use LazyPay as a checkout product. And this is really helping us accelerating the growth of our consumers. At the moment we're adding 150,000 new customers a month, active customers, which means we will have close to a million active consumers on LazyPay by the beginning of next year. So, that's already a sizable and active base of consumers. And this is also a profitable business. Now, where do we go from there, there are two directions. The first one is, as Basil mentioned, during the COVID, we are actually careful during COVID with our personal loans. But actually now we are starting to dial up again, the amount of origination that we're doing for this. So, that's the first thing from buy-now-pay-later to more personal loans. Okay, we are doing around $50 million a month in personal loans and it will double very quickly. We have a credit risk under control. But the second thing that you alluded to that we can do is actually moving to digital banking. The brand will be making pay, the product is ready. And the product will be fundamentally credit led what it means, it means that consumers will be able to access a line of credit and use it of course online but use it also offline through a credit card that we will be issuing a partnership with the bank. So, that's really the core proposition of traditional banking solution. It's around credits. At the moment, the product is only being used by friends and family, it will be actually open to the general public next week. And we already have a waiting list, which is quite encouraging little bit more than 100,000 users of LazyPay registered for that. So, this will be the big push that we will see next year in the market.

[Bob van Dijk:]

Thanks, and Larry over to you.

[Larry Illg:]

Okay, thanks. here. So, question on consolidation and views on Wolt, I think with Wolt specifically, it's a technology for business that was built in some of the hardest markets in the world. If you reflect back, just a couple years ago, there was a view that restaurant food delivery couldn't work in smaller cities and expensive labor markets, and that Wolt has made that work speaks to the potential of the model. And that it's able to reach many more use cases and find profitability, even in markets where people thought that was not possible, very similar to how iFood in a matter of years has been able to get to many more cities than previously imagined. It's fueled some of our enthusiasm about this space. This is not a niche behavior. So, I think that's some of the dynamics in play around the Wolt acquisition. And then in terms of consolidation more broadly, I think it's important to note that these food delivery businesses are inherently local. So, while in the setting, we often talk about cross border and global consolidation. we're increasingly seeing consolidation locally as businesses build out local ecosystems, as we touched on a little earlier on the call in grocery and convenience, and Fintech is there building on the back of these platforms.

[Bob van Dijk:]

Thanks, Larry. And I think we're running a little bit over here. But I think, operator, if there's one more question in queue, I think we can do it. And then we should probably close off today.

[Operator:]

Of course, the last question is from Catherine O'Neill of Citi. Please go ahead.

[Catherine O'Neill:]

Great, thank you. I just wanted to come back to Classifieds actually, where the profitability was obviously very solid, including auto transactions, which was I think a broadly similar last year-on-year. Firstly, I just wondered how you think about the value of Classifieds remaining as part of the broader process group. And then secondly, I just wanted to see if you provide a bit more detail on your transaction ramp up, especially in the second-half, should we assume that is going to more than offset the profitability in the school Classifieds business? Thank you.

[Romain Voog:]

Yes, and maybe I'll take that out of the wind on both. I think I should answer the first question rather than him. I think on the second one, we don't give guidance. I think that's relatively hard to give a view on. It's also very dependent on the speed at which we can grow the business. So, there, I think we're going to disappoint you. I think on the first question look, I think OLX is a business that's done exceptionally well, right. I remember, when I took over as CEO, we were investing several hundreds of millions of dollars into the year. And I think our investors were a little nervous at the time, from what would actually create value. Now, we've created a business segment that is worth well over $10 billion, well over $10 billion, with actually an investment that was given the size of that opportunity, quite limited and a great rate of return. So, I think now everybody is actually quite excited about that value creation. And I think that business given its trajectory, and its size, I think is basically coming a business that could stand on its own. On the other side, you've heard speak about the further potential in transactions and that that is a business that we want to build. And we want to build that and there is real work to be done there. And it is there's real investment to be made to get also that value creation story to fruition. So, we'll think about whether that is what the right moment is for the business to stand on its own, but it's definitely the combination of future aggressions of power but also an investment story on the order basis going forward.

[Operator:]

Thank you, sir. Then we have no further questions in the queue. Do you have any closing comments?

[Bob van Dijk:]

No, except to say, thank you for joining us today; I hope you are excited as we are, about the momentum in the business, and what the value creation story is so far, and there is more to come, and thanks for the great questions that you asked today. So, have a good evening.

[Operator:]

Thank you very much, sir. Ladies and gentlemen, that then concludes this event, and you may now disconnect.