Allegro e-commerce posts PLN 734.1 mln adj. EBITDA in Q3 2024, above market expectations

Here are the Allegro's results in the third quarter of 2024, compared to the PAP Biznes consensus:

As Allegro pointed out, the group gross merchandise value (GMV), including international operations, grew by almost 10 percent, or at the higher end of expectations, while consolidated adjusted EBITDA has slightly beaten the outlook for the period, with an 8.6 percent year-on-year increase.

GMV from Polish operations rose by 10.8 percent year on year — more than five times faster than the country's nominal retail sales — to reach PLN 14.7 billion (EUR 3.4 bln) in the third quarter.

Active buyers hit 20.5 million across Allegro’s regional footprint, including over 5.5 million consumers outside Poland.

Allegro’s active buyers base in Poland exceeded 14.9 million in the third quarter of 2024, with the average GMV per active buyer accelerating growth to 6.8 percent year on year at PLN 3,950 (EUR 909.68) per annum.

"Within eighteen months, Allegro launched platforms in three new markets, with millions of consumers already buying with us and thousands of local merchants boosting their businesses on Allegro," said the company's CEO Roy Perticucci, quoted in the press release.

"It demonstrates the adaptability of our model. Allegro is now serving 20.5 million active buyers across the region, simplifying e-commerce for consumers and merchants everywhere we operate," he added.

Revenue in Poland increased by 17.1 percent year on year to PLN 2.29 billion (EUR 527.4 mln), with advertising revenue up by more than 30 percent year on year.

Adjusted EBITDA from Polish operations increased by 13.5 percent year on year — slightly above expectations — to PLN 883 million (EUR 203.4 mln) in the third quarter of 2024. Adjusted EBITDA margin came in at 6 percent of GMV, again ahead of Allegro's midterm aspirations range of 5.3-5.7 percent.

"Allegro maintained excellent profit margins in the Polish business during the third quarter and continued to scale its marketplace model internationally. Profitability in Poland and on the group level landed slightly ahead of expectations, while Allegro’s overall leverage dipped below 1x group Adjusted EBITDA," said the company's CFO Jon Eastick, quoted in the press release.

"This is a strong financial position that gives us confidence for further gradual expansion in the region, and investment into our growth engines in advertising, fintech and logistics. Allegro’s Polish shoppers have been increasing their spending with us at the fastest annualised rate in a year, despite signs of weakening retail sales," he added.

Eastick indicated that the Allegro's guidance for the fourth quarter of 2024 demonstrates the company's confidence, as it aims to accelerate GMV growth to as much as 13 percent year on year.

"We know this will cost more in terms of marketing, but we also believe Allegro will be rewarded for great Christmas offers with increasing customer loyalty. While our Adjusted EBITDA growth is expected to slow down in the fourth quarter, our full-year adjusted EBITDA margin should stay above our medium-term aspiration of 5.3-5.7 percent of GMV," the CFO said.

Allegro is expecting GMV growth for Polish operations in the fourth quarter of 2023 in an 11-13 percent range year on year, with revenue projected to rise by 13-16 percent, and an adjusted EBITDA up by 4-7 percent year on year.

GMV for international operations is expected to fall by 25-28 percent year on year in the last quarter of 2024.

"Due to the ongoing reduction of loss-making sales in the MALL Segment, offsetting the organic growth of Allegro international marketplaces, revenue may decline by 48-52 percent year on year, while the adjusted EBITDA loss is anticipated at PLN 210-230 million," the company said in the press release.

CAPEX is foreseen at PLN 170-180 million (EUR 39.2-41.5 mln) in Poland and PLN 30-40 million (EUR 6.9-9.2 mln) in international operations during the fourth quarter of 2024.

Consolidated GMV is expected to grow by 8-10 percent year on year, with revenue seen between minus 2 percent and plus 2 percent year on year. The group’s adjusted EBITDA decline is predicted at 2-6 percent year on year, with consolidated CAPEX seen coming in at PLN 200-220 million (EUR 46.1-50.7 mln).

ao/