- It was another quarter of significant strengthening of the gross margin – a sharp increase was recorded in HalfPrice (+13 pp) and CCC (+5 pp).
- In each business line, the cost-to-income ratio was lower year-on-year as a result of continued high cost discipline.
- In July, the Group successfully completed the refinancing process of the CCC Business Unit, which in the following quarters will have a positive impact on the reduction of financing costs and releases the potential for further dynamic development of the most profitable and proven business formats.
Higher CCC margins
In Q2'24, the CCC Group once again recorded a strengthening of the gross margin, which was higher by 4 pp yoy. In the quarter in question, a sharp improvement in the margin was recorded in the CCC brand – it increased by 5 pp yoy. This is the second consecutive quarter with a gross margin of approximately 60%. However, in HalfPrice the gross margin was higher by almost 13 pp y/y. The above is the result of a good, constantly developed, attractive product offer, better terms of purchase of the collection and a conservative pricing policy in the mentioned brands.
For the second quarter in a row, we record a sharp improvement in results, proving that our unique business model meets the needs of today's customers very well. We are consistently strengthening the gross margin, including in the CCC brand, thanks to the continued development of the high-margin licensing model. Our offer includes globally recognized brands that help us generate good LFL sales and strengthen profitability, especially abroad. The share of licensed brands in the offer of CCC and other Group signs will continue to increase in the coming quarters – said Dariusz Miłek, president of the management board of the CCC Group.
In the second quarter, the CCC Group maintained high cost discipline. In the period in question, the cost to income ratio was lower y/y in both CCC, HalfPrice and the Modivo Group. The Group's costs were reduced by 1%, while the retail space of the entire Group increased by 7%. The CCC brand alone recorded a 2% decrease in costs, and this is the eighth consecutive quarter of year-on-year reductions in this indicator. In turn, the Modivo Group recorded lower costs by 4% y/y.
CCC maintains cost discipline
We are particularly proud of maintaining high cost discipline – each business line has improved its cost ratio, which at the Group level is only approximately 40% (-3 pp yoy), and we would like to improve it even further in the second half of the year. Thanks to constant work on profitability, our signs stand out for their results. CCC achieves industry-leading EBITDA margin levels, and HalfPrice is well positioned against global competitors despite its young age. For the second quarter in a row, the Modivo Group also improved its results, which are still not satisfactory, but it is a step in the right direction – says Dariusz Miłek.
In Q2'24, the CCC Group generated an operating result of PLN 249 million (over a 3-fold increase yoy) and PLN 401 million of EBITDA profit (+79% yoy). Szyld CCC recorded an operating result higher by PLN 85 million (+74% yoy) with an EBITDA profitability of 26% (+6 pp yoy). In turn, HalfPrice in Q2'24 recorded a sharp improvement in EBITDA profitability to 18.5% (by over 17 pp y/y), mainly due to the strengthening of the gross margin and high cost discipline. The Modivo Group generated an operating profit of PLN 8 million (+PLN 26 million yoy) and an EBITDA profit of PLN 36 million (+PLN 31 million yoy).
Financing for the CCC Group
In July, the CCC Group successfully completed the refinancing process of the CCC Business Unit, obtaining financing up to PLN 1.8 billion. The new financing structure provides greater flexibility, including: by increasing limits on bank guarantees and letters of credit and reverse factoring, and also allows for the reduction of financial costs and provides for higher limits on available investment outlays. The above unlocks the potential for further expansion of proven and profitable formats in the region.
We are very pleased with obtaining new financing for the CCC Business Unit. We now have access to more, cheaper and more flexible capital. Importantly, the new financing gives us the opportunity to further develop our unique business model. We have great, profitable business formats that have proven successful in many markets. Our duty to shareholders is to continue to develop them. The CCC Group intends to pursue reasonable and profitable expansion in the key markets of its current operations – adds Dariusz Miłek.
CCC SA is one of the largest European companies in the footwear segment. The group has approximately 90 e-commerce platforms and 1,000 stores in 28 countries under the CCC, e-obuwie.pl and MODIVO brands. From May 2021, the Company, through the HalfPrice store chain, is also developing sales in the off-price segment. CCC SA has been listed on the Warsaw Stock Exchange since 2004.
