Allegro expects improved profitability in Poland in next quarters, Q2 sales slightly better (interview)

"The year-on-year EBITDA growth of 5 percent in Poland, we expect to be a low point for this year because we absorbed higher parcel prices from the beginning of January. And we only started to recover those extra costs when we increased co-financing rates in March. You'll see the full impact of the co-financing in the second quarter margin rather than in the first quarter," Allegro's CFO Jon Eastick said in an interview.

"We expect profitability to improve in Poland in following quarters and we're confident in our guidance," he added.

For 2025, Allegro assumes consolidated GMV growth of 8-11 percent, with revenues expected to increase by 7-11 percent. Group adjusted EBITDA growth in 2025 is planned at 10-17 percent year on year, while consolidated CAPEX is estimated at PLN 920 million-1.1 billion (EUR 215.5-257.7 mln.

GMV growth from the Polish operations is expected to be in the range of 9-11 percent for the full year 2025, with revenue growth of 14-17 percent and adjusted EBITDA growth of 8-12 percent.

"We were happy with the first quarter. Given relatively weak retail sales results in Poland, we're very happy to have grown over three times faster than retail sales. We had 8.9 percent higher GMV. We're also very happy with our international marketplaces that grew faster even than in the fourth quarter. They grew 81 percent year on year," Eastick said.

Asked about second quarter trading he said: "The trading has been slightly firmer in the second quarter, no major changes. We do believe that the macro situation should get better later in the year, that the consumer will have more and more spending power, interest rates dropping being one of the reasons."

The CFO assessed that this should help Allegro grow faster as the year progresses.

"The changes in the consumer sentiment are not strong enough to make any kind of definitive comment. But the results are slightly firmer than they were in the first quarter," he added.

Eastick reiterated that the group does not exclude small or medium- sized M&A transactions.

"As we said in our capital allocation policy back in March, we're open to think about acquisitions, which would be small or medium-sized transactions that help the product. We're also open for acquiring competencies that we need," he said.

Asked about a Mediapanel study showing that in March and April, Temu overtook Allegro in the number of users in Poland, CFO Eastick replied that the data collected by Allegro indicates that Temu is moving slowly in the Polish market.

"Chinese platforms are spending a lot on marketing, which means costs of marketing generally are going higher as a result of their presence. And that's really the biggest impact that they're having on us," he pointed out.

On overseas platforms, Allegro expects to increase GMV by 40-50 percent this year with revenues up 55-65 percent.

In the first quarter, Allegro Group's adjusted EBITDA was PLN 749.3 million (EUR 175.5 mln), up 6.1 percent year on year. Gross merchandise value sold (GMV) increased by 8 percent year on year.

pel/ han/ ao/