As the company points out, the financial results for the first half of the previous year also include the data of the Belarusian company LLC DPM, over which the Group lost control in the fourth quarter of 2023. In the case of
After eliminating them from comparable data, the decrease in sales turnover and the value of goods sold is significantly lower and amounts to 8.1% and 8.2%, respectively.
In connection with achieving positive EBITDA in the first half of 2024, the EBITDA margin also took on a positive value, increasing by 16.4 percentage points year-on-year. The change results from the fact that the comparable period includes the financial results of the Belarusian subsidiary DPM, over which the Group lost control at the end of 2023. In the first half of 2023, other operating costs were recognized due to the establishment of impairment write-offs of the value of fixed assets of this company, including goodwill, in the total amount of PLN 36,744 thousand, which significantly reduced EBITDA at that time.
At the end of 2023, the chain had 226 stores in Poland, 138 in the European Union and 37 outside the Union. In the first half of 2023, a new own showroom was opened in Poznań and Kraków, as well as 4 seasonal showrooms and 3 new agency showrooms.
CDRL reduces loss
The Group's operating result was a loss on sales of PLN 3,316 thousand compared to a loss of PLN 3,629 thousand in the first half of the year.
previous year, which constitutes a decrease by 8.6%. The operating result in the first half of 2024 amounted to PLN -6,130 thousand compared to PLN -38,219 thousand in the comparable period. Such a significant change results from the recognition in the comparable period of costs due to impairment write-offs of fixed assets in the amount of PLN 36,744 thousand, of which PLN 35,171 thousand related to the assets of the Belarusian company LLC DPM, over which the Group lost control in the fourth quarter of 2023 – we read in the company's report.
The result on financial activities in the first half of 2024 amounted to PLN 16,278 thousand (including the share in the profit of entities valued using the equity method of PLN 455 thousand), and in the comparable period – PLN 7,074 thousand. The parent company received compensation under insurance for the acquisition of a majority stake (74.9%) in the Belarusian company DPM. The insurer paid CDRL compensation in the total amount of PLN 18,185 thousand, which was recognized as financial income. Furthermore, in the first half of 2024 there was a surplus of positive exchange rate differences over negative ones by PLN 350 thousand (2024 surplus of negative exchange rate differences PLN 4,328 thousand).
The balance sheet total as of June 30, 2024 amounted to PLN 187,260 thousand, which means a decrease of 26% y/y. The decrease in the total value of assets and liabilities by PLN 66,063 thousand is mainly related to the loss of control over LLC DPM, therefore the comparable data also include this company. In addition, the parent company CDRL reduced the level of inventories (a decrease of approx. 17%), as well as credit exposure, the value of which decreased by approx. 53%.
CDRL Strategy
As stated in the company’s report, CDRL’s strategy assumes further development of its operations by focusing on key areas:
• optimization of the store network – the intention of the management board of the parent company is to optimize the store network in Poland and develop sales through e-shops,
• continued growth in sales revenues in the existing store network (LFL) – in order to further increase sales revenues in the existing store network, the Group will take actions aimed at increasing the number of customers shopping in stores and the value of purchases
a single customer, as well as redirect customers to the e-shop,
• improving profitability – the goal is to further improve profitability with increased scale of operations, optimize costs and improve liquidity.
Crocodile Badge Dispute
The parent company is a party to the proceedings before the Polish Patent Office – upon the application of Lacoste SA – for invalidation of the protection right for the word trademark "Coccodrillo" and the protection right for the graphic
trademark (brown and beige crocodile). The parent company is also a party to the proceedings before the Polish Patent Office for determining the expiry of the international registration of the trademark "Crocodile" in the territory of Poland due to its non-use. In the opinion of the company, the claims of Lacoste SA are unfounded, because the trademarks used by both companies are intended to designate different ranges of goods, and moreover, they have sufficient distinctiveness and do not mislead customers as to the origin of the goods marked with them. CDRL also uses other trademarks that are not covered by the dispute with Lacoste SA. Possession of protective rights to these trademarks and their parallel introduction into trade will serve to minimize any potential negative effects of an unfavorable resolution of the dispute with Lacoste SA for the company
What do we know about CDRL
CDRL is an international chain of stores with a comprehensive offer for children. The Group's offer includes products from such own brands as Coccodrillo, Broel, Lemon Explore, Petit Bijou and Mokida. Design is carried out
in Poland by specialized teams of designers. Full control of the quality of production in the countries of Central and Eastern Asia and the selection of materials, cost optimization and a guarantee of security of supplies, an online store in six language versions are the main competitive advantages of the Group.
The CDRL business model combines the advantages of a store format situated in locations convenient for customers, most often in shopping centers and on main city streets with an attractive assortment.
