CCC Group announces its second-quarter 2022 results
The CCC Group announces its second-quarter 2022 results, with PLN 2.4bn in sales, consistent expansion of the omnichannel model and a further improvement in gross margin.
In the second quarter of 2022 (May–July) the CCC Group posted record quarterly sales of PLN 2.4bn. Despite a high comparative base resulting from the reopening of retail stores after pandemic restrictions were lifted last May, sales grew 17% year on year. The CCC Group is constantly rolling out its omnichannel model, expanding its offering and fostering customer experience. In the second quarter of 2022, digital sales accounted for nearly 50% of revenue, growing rapidly to PLN 1.2bn (+26% year on year) and exceeding market trends. Owing to an effective promotional and pricing policy, the CCC Group’s gross margin widened year on year for the sixth consecutive quarter. Gross profit exceeded PLN 1.1bn (+18% year on year).
‘The fashion range, cutting-edge, engaging technology, innovative omnichannel offline stores, efficient logistics and affordable prices are the key drivers of the growth we have posted for another quarter in a row in both online and offline channels. We monitor and control the cost-to-revenue ratio, which is vital considering the current macroeconomic and geopolitical headwinds. Today, the ratio for the CCC Group is in line with expectations,’ said Marcin Czyczerski, President of the CCC Group Management Board. ‘We have built a solid foundation for our business model, which supports our consistent efforts to drive sales growth and performance across our five business lines – in line with the direction set in the GO.25 business strategy.
In the second quarter of 2022, the CCC Group delivered its highest-ever quarterly sales of PLN 2.4bn (+17% year on year). The strong growth was achieved despite the high base effect related to the reopening of stores after a period of a strict lockdown last year. Online sales accounted for around 50% (+4pp year on year) of the Group’s revenue, or nearly PLN 1.2bn (+26% year on year).
‘Sales are growing supported by our product development and customer experience efforts. In early 2022, we set up a dedicated organisational unit, Data&AI Hub, which uses advanced data analytics to stimulate growth across all business areas, including through even better alignment of the offering with consumer expectations. This keeps customers coming back. Today we are reaping the benefits of the omnichannel model we have been rapidly rolling out in recent years. The CCC Group is powered by two strong engines, online and offline, that are inextricably linked together to create great synergies,’ explained Mr Czyczerski.
In the second quarter of 2022, omnichannel sales in the CCC business line came in at close to PLN 1.2bn (+5% year on year). The revenue growth was achieved despite a significant year-on-year reduction in retail space (-5%) following from the store chain optimisation measures, and was supported by a sharp rise in sales per square metre, to PLN 720 (+12% year on year). The online channel ccc.eu was a major contributor (delivering a 140% year-on-year growth), which today accounts for as much as 20% of the segment’s sales. ‘In terms of sales growth, ccc.eu has significantly outperformed the market and competitors. We are set to move forward with sales digitalisation and new technologies to further strengthen our omnichannel business model,’ Mr Czyczerski noted.
The Group’s youngest business line, HalfPrice, delivered rapid growth, generating sales of around PLN 180m, an increase of nearly 50% quarter on quarter. Ten new stores opened in the second quarter.
‘Today, the HalfPrice chain comprises 76 stores in seven countries. The important thing is that, in the context of the fast rollout, revenue is growing faster than the retail space. Our concept is maturing, we are building our market position, and we are strengthening our product offering (including the ‘home’ category), with sales per square metre constantly rising,’ explained Adam Holewa, President of the HalfPrice Management Board. ‘The next market we are set to enter is Romania. We also have plans to expand our e-commerce internationally.
The Group’s gross margin rose 0.3pp year on year to 47.5%, chiefly driven by a 2.4pp year-on-year improvement in gross margin delivered by the CCC business line in the second quarter, at 54.6%. Year on year, the margin has grown for five quarters in a row, led by a number of factors, including a new, effective pricing and promotional policy.
The cost-to-revenue ratio fell nearly 8pp quarter on quarter, to 44% in the second quarter of 2022, which was in line with expectations. Today, the Group’s growth efforts focus on strengthening the most promising areas of business that offer relatively fast monetisation potential, namely e-commerce and HalfPrice.
The Group recorded an operating profit of PLN 79m and EBITDA of PLN 224m, which was broadly flat year on year.
Modivo Group in Q2 2022
The Modivo Group generated PLN 1bn in revenue last quarter (+23% year on year), with the highest revenue growth again delivered by the MODIVO business line (+91% or PLN 181m year on year). eobuwie.pl posted a 14% year-on-year revenue growth, with revenue for the second quarter of 2022 at PLN 820m.
In the second quarter of 2022, the Modivo Group’s gross margin was 40.4%, down 2.7pp year on year, with the drop reflecting intensive efforts to drive sales growth in a challenging competitive environment. ‘Our efforts are bringing the desired outcomes. We deliver higher revenue growth compared with other market players. We are implementing the ambitious plans we have set ourselves. We are actively investing in expanding our sales network: we are increasing the number of hybrid stores, as well as stepping up and precisely profiling our marketing efforts and developing our own marketplace,’ said Damian Zapłata, President of the Management Board of the Modivo Group.
In the past quarter, the Modivo Group’s SG&A costs stood at PLN 383m, up 27% year on year, growing at a rate similar to revenue. The increase in SG&A costs reflected continued growth of the Group’s business: expansion into new markets, technology development and work related to marketplace implementation.
The MODIVO Group posted EBITDA of ca. PLN 40m, with a margin of 4%.
