Allegro InPost goes down sharply Rafał Brzoska collapse of Polish e-commerce

During Tuesday’s conversation at the European Economic Congress, Rafał Brzoska pointed out that last year for InPost, which began with its debut on the Amsterdam stock exchange, was better than expected.

On the other hand, the manager said that the situation in the e-commerce market has deteriorated recently due to major macroeconomic changes. – Growth rate of 20% we forecast the e-commerce market in the first half of 2021. Already in the fall we said that the situation was different and that the market forecast could be 12%. growth. Now we say it will probably be in the single digits – said Brzoska (quote from

He stressed that the last quarters of the year will be of critical importance, as they will show the real impact of rising inflation and rising interest rates. – In the short term, we are preparing for a sharp slowdown in the economyhowever, as a business, we will grow significantly above the market – he assured.

Brzoska’s statement was quickly reported by some news agencies, industry websites and social media profiles in Capital Markets.

Allegro is a record price on the stock exchange

There was no need to wait for the reaction of stock market investors. Allegro’s rate fell by 9.02%. to 24,615 PLN with a turnover of 166.3 million PLN. On Tuesday, only the trading of KGHM shares (177.7 million PLN) had more value on the Warsaw Stock Exchange, and was slightly lower in the case of PKO BP (163.3 million PLN). The WIG index fell by 1.02% and the WIG20 (Allegro is part of both indices) – by 1.2%.

Allegro’s price was at an all-time high at the close of trading since the company’s debut on the stock market in October 2020. At listing, the company’s shares were already cheaper (on March 7 they fell to 23.12 PLN), while at the close of the session, they were below 26 PLN for the first time.

Allegro has been on a downward trend since the beginning of September last year, when its price last exceeded 70 PLN. At the beginning of December it was only around PLN 35, in mid-October, the day Amazon announced the launch of its Prime subscription service in Poland, the Allegro share fell by 7.3%.

In March, there was a rebound from around 26 PLN to 36 PLN, but recent declines have more than offset this increase.

Allegro is by far the most popular e-commerce platform in Poland. According to a study by Mediapanel in January this year. registered 21.87 million users and 73.58 percent. Scope.

In the fourth quarter of last year Allegro’s revenues increased by 23.2%. to PLN 1.6 billion and PLN 199.7 million net profit. The company forecasts that over the years 2022-2026, revenues will grow by around a dozen percent, and adjusted EBITDA will be 20 percent in the mid-range or higher. At the end of February, it was announced that the chairman and CEO of François Nuyts would leave Allegro, and he will take up this role from the end of this year at the latest.

InPost rate of 7.6%. Down

On the other hand Shares of InPost, listed on the Amsterdam stock exchange, fell 7.64% on Tuesday. up to 5.39 euros.

The company’s share price has fallen sharply since mid-November last year. – from around 14.50 euros, it slipped to 4.20 euros on 8 March. This was not stopped by the several purchases of large blocks of shares by company executives, incl. Rafal Brzoska.

At the end of March, the stock briefly rose from around 5.20 euros to 7.20 euros after Bloomberg announced that several mutual funds were interested in acquiring InPost in order to take advantage of its low market valuation. The company, a few hours after the publication of the information, assured that it “does not conduct discussions with these market players and is not aware that such discussions are in progress”.

The stock market sale of InPost caused Rafał Brzoska, whose vast majority of assets are a minority stake in the company, to register a significant drop from the list of the richest Poles according to Forbes. In the comparison since the beginning of last year was the seventh with a possession valued at 5.68 billion PLN, and this year. took the 23rd position out of PLN 2.569 billion.

Brzoska predicts a hole in Polish e-commerce in the middle of the year

TO. On the 17th, at the close of the trading session, PAP Biznes published a cable with longer statements by Rafał Brzoska on the situation in the Polish e-commerce market.

– We work with 100 percent. Polish e-commerce from all sectors and we can clearly see how this market is performing. In November of last year, we started warning the market that e-commerce was slowing down. Rising inflationary pressure and rising interest rates have only reinforced our belief that the global e-commerce market will slow, but in this environment InPost will outperform the market, Brzoska said.

– Today, I believe that in Europe, especially in Western Europe, we will have to face a deceleration after the first quarter. In some EU countries, even at the level of 10% or more. Every year. Pressure from inflation and energy costs will continue to mount, consumer moods will worsen, because if you look at all the indexes measuring sentiment, they look very weak – a- he added.

The president of InPost referred to data released by Salesforce on Tuesday. – Today Salesforce released data showing that in the first quarter there was a drop in e-commerce globally of minus 3%, and across Europe it’s a drop of 13%. So we were right in November, and now I only know that it’s probably not the end and the e-commerce market will hit a real hole, probably only in the second or third quarter of this year – said Rafal Brzoska.

For Central and Eastern Europe, Salesforce showed a 3% decline, which in the opinion of the President of InPost seems very cautious, but possible because this part of Europe is catching up with Western Europe, so we leave on a slightly different level.

– In this context, in my opinion, Poland will be much better than average, as already shown by the GUS data from last Friday – he said.

Immediately after the outbreak of war, 30-40%. fewer online purchases

Rafał Brzoska informed that after the outbreak of the war in Ukraine, the first week the number of orders decreased by 30-40%. – It was rebuilt later, the second half of March and April looked much better – he said.

– A month ago, at the end of the first quarter, we said that no matter how the market behaved, InPost would beat it and our net market share would increase. Today I can say that in some markets it will beat us very well, which shows the strength of the organization and the relationship with the end customer that we have managed to build. If the market in Poland will be at 12 percent. positive in terms of the number of orders, which a month ago seemed like a very optimistic scenario, and today, looking at the data presented by Salesforce, I do not think, we will strengthen. With inflationary pressure and an increasingly thin consumer wallet, the average basket and the frequency of purchases are decreasing – described the president of InPost.

In the opinion of Rafał Brzoska, the current situation combined with the war and rising energy prices will accelerate delivery methods to InPost parcel lockers, as home delivery will become more and more expensive. He recalls the analysis of JP Morgan according to which if Europe imposed complete sanctions on Russian oil, the price per barrel would rise to 180-188 USD.

– This means that a classic courier who delivers the package to your home will cost even more. During a working day, the courier is able to deliver about 60 parcels, and the same courier delivers almost 1000 parcels to InPost parcel lockers. We are therefore talking about twelve times the energy efficiency of this form of delivery, which also makes parcel lockers relatively cheaper than home deliveries, which means that Internet companies, in order to save costs in a more difficult market, will all the more promote the form of economic delivery. I will say provocatively – the more difficult the market situation, the faster we will grow – he said.

The chairman recalled that a month and a half ago, InPost published the ESG strategy. – We assume that InPost means ESG, both in terms of social factors and energy efficiency. Since the first day of the war, we have been transporting humanitarian aid to Ukraine free of charge, more than 6,000 tons with a transport equivalent of around 4 million euros, if someone wanted to measure how much this transport would cost commercially . Yesterday, a transport of 34 containers, more than 500 tons of humanitarian aid, also arrived directly in Kharkiv, which I financed with my wife, he informed.

– InPost in 2040 wants to be completely neutral in terms of CO2 emissions, which in the case of a logistics company is an extremely difficult task, but in our case an achievable task – said the President of InPost.

In the fourth quarter of last year InPost’s revenue nearly doubled, incl. following the acquisition of Mondial Relay, and net profit from continuing operations increased from PLN 144 to 174.2 million. Allegro’s share of InPost’s annual turnover in Poland increased from 48% to 46%.

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