Welcome to Q2 2025 Financial Results of Żabka Group C onference Call. After the speaker's remarks, there will be a question- and- answer session. The webcast will be recorded, and an archive of the webcast will be posted on the company's website. By participating in the Zoom call, you are agreeing that recordings made during this event may be shared by Żabka Group. For those of you who are joining us via Zoom, if you wish to ask a question during the Q&A, we ask that you please use the raised hand function at the bottom of your Zoom screen, or if you've dialed in, please press Star, nine. If you already have a question, please do this now. Once it's your turn, the moderator will introduce you. Please then unmute yourself and ask your question. I would now like to hand the call over to Filip Paszke. Thank you very much. Hello everyone, and welcome to our Q2 earnings call. My name is Filip Paszke, and I'm the Company Director responsible for Investor Relations and Governance. We have about a 30-minute presentation, which will be followed by a Q&A session. I will now hand over to Mr. Tomasz Suchański, CEO of Żabka Group. Thank you, Filip. Good morning, or good afternoon, and welcome to our meeting with the Żabka Group, where we will be discussing the results of the second quarter of 2025. My name is Tomasz Suchański, I'm CEO of Żabka Group, and I'm joined today with two of my colleagues from the board: Marta, our CFO, and Tomasz, our Chief Strategy and Development Officer. In the second quarter of 2025, I'm proud to announce that Żabka continues to deliver strong performance as we are building growth dynamics across all key financial and operational metrics. Sales to end customers reached PLN 8.1 billion, representing a 14% year-over-year increase, supported by solid like-for-like growth of 6.1%. The consistent momentum confirms the strength of our customer proposition and operational execution, especially considering that May this year was not very good, was actually quite cold, which Marta will provide more details on during today's call. Our store network grew further to reach 11,793 locations across Poland and Romania, with 1,256 openings over the last 12 months. This marks another quarter of accelerated rollout, supported by a robust pipeline and strong performance of newly opened stores. I am happy and pleased to announce that this allows us to upgrade our guidance for the stores opening for this year from over 1,100 stores, as we were discussing last time, to over 1,300 locations in Poland and Romania. My colleagues will provide further insights on these results in just a moment. All those allowed us to achieve significant profitability growth in the second quarter. Our gross profit was PLN 1,327 million, a 19% increase from last year. Adjusted EBITDA increased by 20% year-over-year to PLN 1,057 million. Importantly, our core business, ultimate convenience stores in Poland, adjusted EBITDA margin improved by 0.9 percentage points year-over-year, reflecting sales growth, continued operating leverage, and disciplined cost management. Adjusted net profit reached PLN 221 million, up 26% year-over-year, in line with our seasonality profile discussed during the previous call. Finally, we continue to deleverage with a financial debt to adjusted EBITDA improving to 1.2x, down 0.5x year-over-year, supported by strong cash generation. In summary, we are very pleased with our second quarter and first half performance, which keeps us firmly on track to deliver on our guidance. Overall, the consumer environment remains stable, although there are a few cautionary signs in the retail sales data or fluctuating consumer confidence reading. At the same time, Polish consumers seem to be feeling more optimistic about the financial situation of their households. Tomasz will provide more color on that front in just minutes. In that setting, we have kept up strong momentum across all our strategic areas. In the second quarter of 2025, Żabka accelerated its store rollout pace. As I mentioned, we are upgrading the guidance and are targeting over 1,300 new openings for the full year across Poland and Romania. This reflects our confidence in the strength of our execution, which is based on very good performance of our newly opened stores. We opened 368 new stores in the second quarter, bringing the half-year total to 804 locations. Our like-for-like growth reached 6.1% in the second quarter and the first half of the year, consistently strengthening our market position. In Romania, at the end of the first half of the year, our footprint expanded to 109 stores. We are proactively refining our customer proposition and business model in this market, with many key performance indicators continuing to show very strong results to date. Our digital business continues to deliver. This part of our ecosystem recorded dynamic growth with sales to end customers up 28% year-over-year in the second quarter. I will hand over to Tomasz, who will walk you through the market environment and provide further detail on our strategic execution. Tomasz? Thank you, Tomasz. Hello everyone. Let's kick off with the macro and consumer backdrop. Since we met the last time in May, we see some positive and optimistic trends among the customers. Having said that, there are also some hesitant indicators as well. If you look at the real wages growth, they continue to be positive, continue growing, and the inflation has stabilized, somewhat decreasing. If we look at the consumer confidence index, we had mixed readings in the last few months. We had a very positive reading in June, followed by a decrease in July. What is not shown here, but important as well, which is the labor situation, we have seen some softening data in labor, given the seasonality, slightly below the expectations in the last reading too. On the other hand, we see very optimistic and positive trends in the area of the consumer's assessment of their financial situation, which you see on the bottom of this slide. Overall, we see some positive momentum, having said that there are some indicators which also create some mixed picture. On this backdrop, the FMCG market growth in the second half of the year, and Q2 in particular of 5.1%, was relatively similar to prior quarters. You have seen the also quite, I would call it, traditional trends among the channels. The discounter and our modern convenience channel grew the fastest, while some other channels have been growing slower. What is important to mention here as well is that given the changing date of the Easter holiday from the first quarter last year to the second quarter this year, this market snapshot is a little bit more distorted than you would normally see in a regular quarter. For us, the Easter, as we mentioned a few times, doesn't have any particular impact. Therefore, our strong overperformance of the market, we grew close to three times faster than the market, is particularly encouraging and resulted in us increasing the market share to 10.6%, 0.7% year-over-year growth, which is somewhat faster than what we have seen in the last few quarters. Moving on to the network expansion and franchisee area. As we have mentioned, in the first half of this year, we opened 804 stores, 90 more than the last year. This is the highest figure that we ever recorded. We currently have close to 12,000 stores. In the last 12 months, finishing in June 2025, we opened more than 1,200 stores, which again is the highest pace of growth that we ever recorded in nominal figures. On top of it, we have secured close to 1,700 contracts that are already kind of signed for the stores to be opened in the first half of 2025, including the ones that we opened in the first half, which consists of the entire 1,250 for the current year and close to 500 for future periods. This is the highest number I think we've ever had. In that context, we have decided to revise upwards the pace of openings for this year to 1,300, while we see that we will maintain the industry-leading paybacks at the level that we have previously communicated. Moving on to the franchisee situation, in the last 12 months, we recruited more than 2,500 franchisees, which is an adequate number to cover the expansion needs as well as the rotation of the franchisees. The financial aspects of that, so the revenue of the franchisee, the franchise margin increased pretty much in line with the store sales and is in line with our expectations. We believe that this provides for positive financial momentum for the franchisees as well. Moving on to the second pillar of our growth, so the like-for-likes. Here in this last quarter, growing at 6.1% against, I would say, especially in the main negative weather environment. We are particularly proud of that number. One of the key pillars of the growth was again the QMS. We have concluded remodeling of the entire chain to include the Merrychef ovens, as we previously communicated as well that we will do so. On top of it, we have been working on improving the product offerings. Here we have included the hot breakfast into our offering, and that resulted in the sales of 1 million hot breakfasts in the first month, which is very encouraging for us going forward. Overall, the QMS grew to double-digit like-for-likes, and it remains one of the fastest growing and most contributing growing categories among all for us. Additionally, here what we started and what we kind of accelerate is the introduction of Maczfit brand into Żabka stores. Maczfit is the direct-to-consumer meals brand that we operate within our ecosystem. We have close to 30 SKUs available at Żabka stores, and that cements our positioning in terms of healthy and fresh foods. In terms of digital initiatives, here I think it's worthwhile to come back to something we have been discussing with you late last year, which is the retail media initiatives, which currently gains momentum. We have been installing screens in close to, well, around 3,000 locations and more than 4,000 screens, which engage now 14 million customers. We have run 170 campaigns in 2025, and we have various around 150 different brands. These initiatives we see as a very positive addition to our business, both stimulating consumer in terms of like-for-likes, as well as having a positive impact on our bottom line. Overall, we are very pleased with how this quarter went in terms of like-for-likes, and we are encouraged for the second part of the year, given the momentum that we had in the light of the, let's say, not so favorable May weather. With that, I want to pass over the mic to Marta to cover the financials. Thank you, Tomasz, and hi everyone. We delivered a solid set of results in the second quarter of 2025 with strong execution across all strategic priorities. Building on the momentum from the first quarter, we continued to see healthy like-for-like growth, further margin improvement in both our core Polish operations and the digital convenience ecosystem, as well as with accelerated store openings. Sales to end customers reached more than PLN 8 billion, demonstrating solid 14% year-on-year growth, driven by increasing sales at our stores and new openings. Despite a high base effect of the second quarter of 2024 and unseasonably cold weather in May, in the second quarter, we delivered a solid like-for-like growth of 6.1%. As a reminder, unlike many other retailers and particularly discounters, our like-for-like is not significantly impacted by the timing of Easter. Therefore, the like-for-like performance was broadly consistent in the second quarter with the first quarter of this year. Our like-for-like momentum continues to be driven by recent strategic initiatives, including the updated customer app, personalized campaigns within retail media Tomasz discussed, and the rollout of new street food offerings, along with strong performance in key categories, most notably QMS, which delivered double-digit like-for-like growth. Looking at our solid H1 performance and current trading trends, we remain confident in achieving mid to high single-digit like-for-like growth for the full year. In the second quarter, we also continued to accelerate our expansion. Opening in the first half of 2025 was 804 new stores in Poland and in Romania. It was 90 stores more than in the first half of 2024. New store performance remained strong. It is very important for us, and we have built a robust pipeline of over 1,700 high-quality locations for this year and for the next years. Given that, and given our continued ability to attract new franchisees, we are confident that in 2025, we will be able to open more than 1,300 high-quality stores across Poland and Romania. Adjusted EBITDA reached PLN 1,057,000,000, a solid 20% year-over-year increase, with 65 basis points margin expansion on the back of strong performance of our Polish business and increasing and positive EBITDA for our digital convenience offering. Given our first half results and continued strong performance of our core business, we remain confident in delivering our full-year adjusted EBITDA margin guidance. The adjusted net profit margin came in at PLN 221,000,000, up 26% year-over-year, delivering a margin of 2.7%. As you know from our previous discussions, we expect continued improvement in recurring adjusted net profit margin to 3% in the near term. Finally, moving to cash flows, driven by strong operational momentum and, over the past 12 months, effective working capital management and disciplined CapEx, we have delivered free cash flow of more than PLN 1 billion, up 14% year-on-year, and significantly reduced our leverage profile to 1.2x EBITDA, down from 1.7x a year ago. When you look at our profit and loss, sales to end customers growth in the second quarter of 2025 was driven by a healthy mix of organic growth with like-for-like of 6.1%, store expansion, and increased contribution from new growth engines. Our like-for-like performance varied significantly across the months of the quarter. It was in a high single digit in April and in June, driven by higher volume, higher pricing, and a positive mix effect, while in May, it was notably weaker, however, with overall like-for-like still in positive territory. As you may recall, last year, in 2024, May was exceptionally warm in Poland. It resulted in high base. This year, the weather was poor, and it was the coldest May in over 30 years in Poland. This had a negative effect on our overall second quarter like-for-like performance. When you look at EBITDA, we delivered a strong 20% increase in adjusted EBITDA and a 65 basis point increase in the margin. It was on the back of strong performance of the Polish business, where EBITDA margin increased by 91 basis points. It was driven by improved terms of trade with suppliers based on the higher scale, lower energy costs, and disciplined cost management, also supported by increasing and positive EBITDA for our digital convenience offering. We also increased our franchisees' payout. By the way, the growth in the second quarter is partially non-recurring and non-cash, IFRS-related Easter timing effect linked to inventory buildup across quarters. The H1 figure is therefore more representative of the underlying franchisee cost dynamics. Reported EBITDA amounted to PLN 1,002 million, up 16% year-over-year, including a PLN 51 million expense related to IPO award and long-term incentive plan. Looking at other costs impacting net profit below EBITDA, depreciation was in line with our expectation, and as a percentage of sales was slightly below last year, and financial costs were impacted. It is important to mention they were impacted by a non-cash charge of $50 million related to repayment of $1 billion of debt, primarily reflecting arrangement fees and IRR revaluation adjustments. Excluding these non-cash items, other financial costs, as you see in the financial statements, decreased. They were 3.5% of sales in the second quarter of 2024, and they declined to 3% in the second quarter of 2025. This improvement was mainly driven by lower net debt, reduced margin on our main financing facility, as well as attractive pricing on the newly issued bonds. Despite these non-cash costs, adjusted EBITDA came in at $221 million, up 26% year-over-year, delivering a margin of 2.7%, fully in line with our expectations. Given the recent changes in our financing structure, including margin improvements and the bonds issuance, we expect a decline in financing costs as a percentage of sales, which will support an increase in net profit. In the near term, as I mentioned, we anticipate that the net profit margin will move towards 3%. For the full year 2025, we expect also an improvement in the effective tax rate compared to the previous year, when the ETR stood at 25%, as you may recall. When you look on the EBITDA bridge, you see that our adjusted EBITDA increased from $881 million in the second quarter of 2024 to $1.057 billion this year. This strong growth was driven mainly by excellent performance of our core business, so Ultimate Convenience in Poland, as shown in the first part of the bridge. In Poland, we recorded incremental sales from both like-for-like growth and new stores opening and delivered in the same time 90 basis points improvement in EBITDA margin. The margin expansion was driven by improved terms of trade with our suppliers, reflecting higher volumes and more effective promotions based on our app, and were further reinforced by our cost-conscious approach and continued operational efficiency gains. For the past few quarters, we have remained strongly focused on effective cost management. It has enabled us to reduce energy costs per store by securing the energy at the lower prices and by reducing the consumption of the energy at our stores. We also decreased logistics costs as a percentage of sales through the process improvements, including better vehicle load optimization, as well as increased scale of our new automated distribution center near Warsaw. We have also leveraged data and digital tools to optimize field force routines. As you see on the bridge, economics of scale and cost discipline helped us deliver a 100 basis point gross profit margin improvement at Żabka Polska. Marketing costs in the second quarter were slightly higher year -over- year, driven by a national QMS campaign supporting the launch of our new street food offering, QMS. Central costs for Żabka Polska, which include G&A as well as technology, remain broadly stable as a percentage of sales in the second quarter. When you look at the data for the first half of the year, the central cost growth remained below the pace of sales growth. Looking at the bridge, new growth engine now includes, as you remember, the digital convenience offering, as well as Romanian operations, which have been part of this segment since March 2024. Sales of new growth engine grew by 30% in the second quarter of 2025 to PLN 382 million, and investment in new growth engine increased from PLN 11 million in the second quarter last year to PLN 21 million in the second quarter this year, mainly reflecting the ongoing development of the Romanian business and the rollout of new stores. Finally, as one of the last elements on the bridge, you see the adjustments and reclassifications, which, as you remember, include the non-cash costs of PLN 17 million related to IPO awards to be granted to Żabka, to our franchisees, our employees, and B2B contractors in October 2025, and the LTIP expenses, which were PLN 34 million in this quarter. The reclassifications primarily related to the minimum tax in Romania, which under IFRS is reported within operating expenses, but for the purpose of comparability and the analysis, we presented in the tax line before the net profit. Now moving to the cash flows. As you know, our cash flow, and especially free cash flows, generation follows a clear seasonal pattern. The first and the fourth quarter typically being the weakest quarters, and the second quarter is structurally the strongest. Historically, the second quarter has contributed over 60% of annual free cash flow, and this year's results clearly reflect this trend. As highlighted in our previous discussion, the third quarter is also cash generative. Cash flow is positive, while in the fourth quarter, it tends to be free cash flow negative due to lower EBITDA and the outflow from working capital. In line with this typical seasonal trend, in the second quarter of this year, the group generated a very positive, very strong free cash flow of over PLN 1 billion. It was supported by solid operational performance and the release of cash from working capital. It was partially offset by increased capital expenditure, as you can see, which were mainly driven by the accelerated pace of the network expansion and the completion of the street food rollout across the entire store network. The strong free cash flow, which you have seen on the previous page, continued to help us to reduce further our leverage, bringing the net debt to adjusted EBITDA ratio, excluding leases, down to 1.2x adjusted EBITDA as of June 2025. In line with our guidance, we remain committed to further deleveraging with a medium-term target of bringing the ratio below 1x adjusted EBITDA. The last point which I would like to cover before I hand over to Tomasz is the buyback. As presented during the IPO, you may recall that in 2024, we introduced a long-term incentive plan covering the three years, 2025 through 2027. The plan is designed to align the interests of our key people with long-term value creation and shareholders' return. Under the LTIP, awards are granted annually in the form of PSU and the form of RSU. These awards will be settled in shares following the approval of audited financial results for the respective periods. PSU vesting is conditional not only on continued service, but also, as you recall, on performance targets. The targets include EBITDA growth, sales growth, and selected ESG metrics. The first delivery of shares to employees under the LTIP is expected to be in April 2026, following the approval of our financial statements for 2025. In this context, we have decided to proceed with a buyback strategy to secure shares for delivery with a launch planned for today. The program will follow standard market-based pricing practices. This approach reflects both our commitment to deliver the full-year guidance and our conviction about the company's current undervaluation. In addition, it avoids dilution and provides control over timing of execution. The volume would cover up to 4.1 million shares for a wider group of our key employees. With that, I will hand over to Tomasz to summarize our presentation. Thank you, Marta. To conclude our call, Żabka continues to deliver consistently strong results and remains confident in the medium-term outlook shared previously. In the first half of 2025, we maintained robust financial and operational performance with like-for-like growth reaching 6.1%. Our group's adjusted EBITDA margin expanded by 36 basis points to 11.2%, in line with our guidance. This was driven by operating leverage and disciplined cost control. We remained focused on executing our strategic growth pillars. In the first half of the year, we expanded our network to 11,793 stores, up 11% year-over-year. We are also upgrading our guidance to over 1,300 stores opening this year in Poland and Romania. We also made further progress in our digital customer offering in Q2, a segment which grows nearly twice as fast as the group. Looking ahead, we remain confident in delivering our guidance in the near term and in 2025, and upgrading it in terms of the new store openings. Like-for-like growth in the mid to high single-digit range in 2025, revising guidance upwards in terms of network expansion from over 1,100 to over 1,300 new stores opening across Poland and Romania in 2025. Adjusted EBITDA margin towards the top end of our 12%- 13% range in the near term and midterm, and in the end, continued improvement in adjusted net income margin to 3% in the near term. Ladies and gentlemen, that concludes our presentation, and now we are ready for your questions. Thank you. If you wish to ask a question, we ask that you please use the raised hand function at the bottom of your Zoom screen. If you've dialed in, please press Star, nine. Once you've been invited to ask your question, please unmute and ask your question. If you've dialed in, please press star six to unmute. We'll pause for just a moment to allow the questioners to enter the queue. Our first question will come from Grzegorz Kujawski from PKO BP. Please unmute yourself and ask your question. Good afternoon. Congrats on solid results, especially considering the broader market backdrop. I have three questions, please. First, on gross margin, could you clarify the main drivers behind this 100 basis point improvement at Żabka? In particular, it would be helpful to understand the relative weight or contribution of each factor, especially QMS proposition and better terms of trade. Can this improvement be indicative to some extent in quarters ahead? Thank you, Grzegorz. Thank you for this question. In terms of the key drivers, there are a number of factors which all helped us to achieve this good result. As I mentioned during the presentation, we were able, based on the increasing scale, to improve our terms of trade with suppliers. We were also more effective in terms of promotions. We used data and our digital tools, including primarily the Żappka app, to personalize the promotions and therefore to optimize the promotion spending. On top of that, we were very focused on the cost side as well. For a number of quarters, we have introduced the operational improvements which help us to build the results. It was across the entire organization, especially, as I mentioned, within the logistics area where we benefited from the automated distribution center and the enhanced operational efficiency which we could achieve with this new distribution center. We also improved the scheduling for our deliveries and the routing based on the data and the digital tools, which helped also to minimize costs. On top of that, we lowered the consumption of dry ice, which is also quite costly, which impacted positively the cost base as well. We reduced the energy costs, and there was a positive market trend in terms of the energy prices, as you know for sure, and it helped us in terms of the results. On top of that, across the entire organization, including headquarters, but primarily also the field force, we used the data and the digital tools to optimize the processes and build the efficiency. I would say that a number of factors impacted the good results. What is important, I think, is that the operating leverage and the cost efficiency, which you could see in the first half of the year, will support us also in the second half of the year. What remains unknown is the consumer and the market condition and the weather, of course. On the cost side, we will benefit from the changes we've done also in the second half of the year. Thank you. Your answer is also connected with my second question around the guidance of adjusted EBITDA margin, which is maintained and might be too conservative. Looking at the second quarter, where you already reached 13%, and looking at the H1, when you delivered 40 basis points improvement year on year, and H2 is typically seasonally stronger. Are we overlooking potential headwinds, such as weather in Q3 or investments in engine-related businesses? Could you answer that? I think, Grzegorz, we prefer to stay on the conservative side, and therefore we stick to our full-year margin guidance, which we shared in the beginning of the year. There are, of course, some uncertainties around the consumer, and Tomasz discussed that in the beginning of this call. There are some mixed signals in terms of the consumer environment. On the top of that, there is also weather, which we cannot control. Given that, we will prefer to stay on the conservative side and not to change the guidance. As I mentioned, the positive, especially cost improvements, which you see in the first half of the year, will be continued in the second half of the year. Okay. The last one from me is around the expansion in Romania, where we saw lower openings in the second quarter to first quarter, while you increased the guidance for the store openings this year. Is Romania also included in the upgrade guidance? Any update there? You mean lower openings in the second? In In Romania, yes, but in the second quarter, second part of 2025, you mean? Or? I mean quarter- on- quarter. Quarter- on- quarter. Yeah, I think, you know, when we look at when we provided the guidance, 1,300 stores, this includes both Poland and Romania. In terms of Romania, we mentioned a few times already that we will be ready to share more material update in the second part of 2025. We will do so, probably in the next or one of the next meetings with you, which would include some more granular information. At this stage, we're still kind of in the early days of Romania. There could be some variances, therefore, you know, we're testing a few things still already. What we can say at the moment is we maintain what we disclosed already, you know, for Romania, which means that we're encouraged by some of the things, including the customer feedback, including the traction of the customers, especially with the QMS. We also kind of fine-tune some of the things, including the store format for residential areas, assortment, etc. I think at this stage, we would like to kind of conclude the Romania with this information. Okay, thank you. Our next question will come from Piotr Łopaciuk from PKO BP. Please unmute yourself and ask your question. Hello. I have several questions, I guess four. Maybe I will ask them sequentially. First, I think with the quick one, the outlook for openings, it's gross openings or net openings? We always provide the guidance for gross openings, and what we also shared during the IPO is that the closures of our stores will be below 1% per annum. Thank you. I have a second question concerning your revenues. The item related to revenues to sales into increased stores inventory seems particularly high this quarter. This position seems quite volatile and definitely influencing the results on several levels. My question is, could you provide maybe the ratio of inventory versus sales or inventory rotation for the network of stores, which would give some idea how to forecast this change on average? It's a very good question. Thank you, Piotr, for that. The reconciliation for everyone, the reconciliation between sales to end customers and the revenue is provided in the management report. There you can clearly see what is the store inventory change. What is important to understand is that for us, as long as we open new stores, store inventory change will be always positive because it represents the inventory at newly opened stores. When we accelerate the expansion in the first half of 2025, you see that also the higher increase in store inventory change. That's the first point. You referred also in your question particularly to the high increase in the second quarter. This is driven by the different timing of Easter this year compared to last year and inventory replenishment at our stores ahead of the spring season. When assessing store inventory change, it will be better. It will be more accurate when you look at the H1 figures, so year-to-date figures, not necessarily figures for the second quarter because they are distorted by this phasing effect. Last year, the seasonal inventory buildup before the spring season took place in the first quarter of the year, whereas this year, the replenishment took place in the second quarter. As a result, when you look on store inventory change, particularly in the first quarter this year, it was 70% lower than in the first quarter last year. In the second quarter, it was in the other way around. The store inventory change was higher this year compared to the last year. Therefore, it is more representative to look on the first half figures. I'm not, Piotr, if it was clear for you and. Yes, it's clear, just the element I asked for would be the inventory to sales ratio or rotation or whatever in the network, yes. Yeah, there is no significant change in rotation of inventory within our network. You can see that when you look on the receivables and the rotation of receivables, there is not significant change. There may be some, but it is not very significant. We don't see any particular increase in the rotation of inventory at our stores. Could you share the rotation, not the change, but the level of inventory versus sales? It is in the management report. It is the receivables from the franchisees that represent the stock on the store level. Therefore, it is in the report, which you can, you have access to. Yeah, it is in 30 days, yeah. You have also the history, etc. There are all the data that points over there. Okay, the next one would be concerning the acquisition of franchisees. The data in the presentation this time showed that there was a 17% increase in the franchisee acquisition in the last 12 months versus the last 12 months a year ago, while a quarter ago, the dynamics was 10%. It seems quite a change for one quarter. I know there's a little bit faster pace of shop openings, but have you recorded increased potential of franchisees or why the change is that significant, I would say, for one quarter? Yeah, the rotation remains at a very similar level to prior quarters. What we have done here is, as you have rightly pointed out, on one hand, increase the expansion, but secondly, we also reduce the number of stores per franchisee slightly. Thank you. The last one is probably related a bit to the previous question concerning the sales inventory. I guess this also influences the gross margin level, the operating leverage, and probably it's also a factor which influences, I mean, the operating leverage. It also influences your gross margin level, I guess, this quarter positively. Yeah, I think it is, when you see on the improvement in the gross margin, I think it is the data for the first half of the year will be more representative for the longer period of time. There are always some variances between the quarters, so therefore, I would prefer to look at the first half data. Thank you. The last one, sorry for the long list, the question about, I mean, when I look at your sales per square meter this quarter, year- on- year, it looks like +2.5%, while the likes are like 6.1%. Is it like the opening timings that, I mean, new stores open mainly at the end of the quarter? Or why the, I mean, I know it's influenced by the maturity of, by process of maturing the new stores, but the difference seems quite high. Is it the timing of openings focusing at the end of the quarter or was the reason, I mean, in the first quarter, the reason was shorter calendar, I mean, shorter in February? Now, what can be the reason? I think that the main reason may be accelerated expansion, when you have more non-mature stores within the network. Okay, thank you very much for answering this a bit long list. Thanks. Thank you. Thank you. Our next question will come from Ryszard Miodoński with Insignis TFI: Please unmute yourself and ask your question. Hi, Ryszard Miodoński from Insignis TFI. Thank you. Thank you for your presentation and congrats on your results. My question would be regarding the opportunity in the ads market. On page 10, you are mentioning, I think, for one of the first times, the opportunity that you have around 4,000 screens right now in every 3,000 stores that you have. The question is, what kind of opportunity do you see over there, whether you are planning only to sell those ad inventory to yourself or also to the external partners? How big might that be? What kind of margins are achievable? That's the first question. Yeah. Thanks, Ryszard. Good to hear from you. We are still in the process of installing screens. We haven't finalized this process. We're still kind of adding additional screens, and there is still some way to grow that number. We want to be one of the key players in that market overall. If you look at our number of screens with impact on the number of customers, we could be the leading or one of the leading players on the entire Polish market, irrespective of whether this is retail or not retail. That gives us several opportunities. Firstly, we already cooperate with a number of different brands. As you see, we have 170 campaigns sold, which includes the external parties. That includes both the suppliers to Żabka, as well as completely third party, complete third party. The companies that do not have existing business as a supplier with Żabka, right? In fact, we have a triple opportunity. One is to promote our own products, own brands, or whatever we decide. Secondly is to sell it to the suppliers of products. Thirdly is to sell it to third parties, which are not suppliers, right? We already do this. Having said that, we are still in the ramp-up phase and growing that business. We believe that this has two benefits. Firstly, with these first two parts, we have impact on the top line as well as the bottom line. We see from the current business that this has somewhat of an impact on like-for-likes, as well as, you know, obviously, the third parties have impact on the bottom line as well. In terms of the products which are not sold at Żabka store, so the third kind of bucket that I mentioned, this obviously includes, you know, this doesn't have an impact on like-for-likes, but it has impact on the bottom line. Overall, the profitability of this business is very high percentage wise. You can, well, there are some benchmarks from other retailers. This is a very, very profitable business if you look at the, you know, as a percentage of revenue. Having said that, we're still in this phase where we ramp it up. The marketing selling cycles are long. We have launched it late last year, which was too late for this first cycle because these are annual. We're preparing with our inventory, so the screens for this year's marketing cycle, which is towards the end of this year. Overall, we're encouraged by both impact on the customers. That's why we mentioned it here, but also in terms of interaction with the third parties. Thank you. My second and final question would be regarding also the advertising part of the business that you might be expanding over the future. Whether any result of that is included already in the guidance regarding the DCO part or the guidance for the full Żabka, or should we treat that as the add-on? Sorry, I didn't fully understand your question. Which other business? I mean, whether the advertisement part of the business that we are talking about right now is included in the guidance or not. When we presented the long-term plan, this was not really included because it was too early. Thank you. As a reminder, if you would like to ask a question, please use the raised hand feature. If you've dialed in, please press Star, nine. Once you've been invited to ask your question, please unmute and ask your question. I'll just allow another moment to allow any more people to form a queue. Our next question will come from Grzegorz Kujawski from Trigon. Please unmute yourself and ask your question. Yes, I have the final question regarding the sharp increase in franchise margin in Q2. I would like to grasp to what extent did the increase result from category mix and the growing share of higher margin categories also benefiting franchisees or any other factors? Is the growth indicative of the quarters ahead, or should we take a broader view of the context? Yeah, I think that, Grzegorz, the increase, particularly in the second quarter, is a result of what we discussed in terms of change in inventory and the timing of replenishment of the inventory at stores. The fact that, particularly in the second quarter, there was a difference in dynamics of revenue and in dynamics of sales to end customers impacted, of course, also the increase which is visible for the second quarter. Therefore, when you think about the indicative numbers, more representative is the number for year to date. 0.3, 0.5, 0.3, 0.4 percentage point increase is something that we can expect and which is more representative for the more longer period of time. Thank you. That's helpful. Thank you, Grzegorz. That concludes the Q&A session. I'll now pass back to Tomasz Suchański for closing remarks. Thank you. Before we wrap up the meeting, we wanted to thank you all for dialing in today. The next time we see each other will be during the Investors Day on October 1, 2024, to which we sincerely invite you to join us. Thank you very much for today and have a great rest of the day. Thank you. Thank you.