Record high revenue, strong growth of omnichannel model and launch of new concepts and brands – CCC Group summarises financial year 2021
The CCC Group closed FY 2021 (February 2021 – January 2022) with revenue of PLN 7.6bn, a year-on-year increase of almost 45%, with e-commerce accounting for more than a half (51%) of that figure. Despite significant restrictions on offline retail operations in Q1, the Company improved its operating profit by nearly PLN 583m year on year. Sales increased across all of the Group’s business lines.
In 2021, the Company’s key focus was on expanding the omnichannel model. Digitalising the offline network and launching online channels in new markets, it also invested in logistics. In addition, the period saw new brands added to the portfolio and roll-out of HalfPrice.
“In 2021, our revenue hit an all-time high. The market today calls for flexibility, agility and quick action. The CCC Group is all ready for the race – we have clearly defined the directions in which we want to develop in our strategy ‘GO.25: Everything Fashion. Omnichannel Platform’. A broad and diverse product range, strong e-commerce and satisfied customers, who can shop whenever, wherever and however they like – these are our long-term goals, which we have also successfully pursued over the past period. We want to steadily strengthen our position of an industry leader in the CEE region,” says Dariusz Miłek, Chairman of the Supervisory Board of the CCC Group.
Thanks to its flexible approach to business management, investment in new technologies and logistics, and listening to customers’ expectations, the CCC Group closed the financial year 2021 with revenue of PLN 7.6bn (up 45% year on year), with e-commerce accounting for more than a half (51%) of that figure.
The fastest growth of revenue was recorded by MODIVO – it reached PLN 540m in the period, up 125% year on year. eobuwie.pl, the second business line of the MODIVO Group, recorded revenue of nearly PLN 2.9bn (up 41% year on year). CCC’s turnover rose at a rate of 37% year on year, and revenue of the business line amounted to PLN 3.6bn in 2021. The HalfPrice concept, which made its debut in May 2021, reported revenue of PLN 237m. It is also worth noting that DeeZee topped the PLN 100m mark in annual revenue for the first time ever, growing 55% year on year.
“In 2021, we completed a number of strategic projects that consolidated our market position, laying the foundations for further strong growth. We created the HalfPrice concept, which – after just one year on the market – has more than 60 stores in seven countries plus an online presence in Poland. We continued to expand our omnichannel sales model, with CCC e-commerce launched on five new markets, and today our offline stores feature solutions such as tablets for placing online orders and the esize.me function allowing customers to choose the perfect size of shoes. For our customers we created the engaging CCC Club, whose attributes include comfort, modernity and more and more new, fashionable brands. We continued to invest in logistics by expanding our distribution centres and integrating in-store stocks with e-commerce, to ensure even better product availability for customers,’ says Marcin Czyczerski, President of the CCC Group Management Board. ‘We continued the rapid expansion in parallel with the closure of our brick-and-mortar retail operations in the DACH region, strengthening of MODIVO S.A.’s shareholding structure, and agreeing on new, long-term financing terms. We therefore started the new financial year well placed for further growth and consistent implementation of our GO.25 business strategy”.
Last year, the Group’s gross margin rose by 3.4pp year on year, to 47.1%, which corresponds to almost PLN 3.6bn in nominal terms. The highest gross margin in the Group was reported by the CCC segment (53%, an increase of 3.8pp year on year) and DeeZee (52.2%, an increase of 1.9pp year on year).
“A clear margin improvement, mainly in the CCC segment, was chiefly achieved on the back of new pricing and discount policies. We also significantly optimised the inventory mix and levels, reducing the pressure on mid-season sales. By investing in logistics we also improved the turnover of goods in our stores, which allows us to sell more products at initial prices,” says Kryspin Derejczyk, Vice President of the CCC Management Board, Finance and Accounting.
The CCC Group’s revenue has been growing faster than costs. In 2021, costs went up 24.3% year on year. The SG&A to revenue ratio improved by about 8pp (47% in 2021 vs 54.7% in the corresponding period of 2020).
At the end of 2021, the Company’s EBITDA came in at PLN 581.2m (with EBITDA margin of 7.7%, up 7.9pp yoy) and operating profit at PLN 3.9m, a year-on-year improvement of PLN 593.6m and PLN 583.0m, respectively. The 2021 performance was strongly affected by administrative restrictions on brick-and-mortar stores (especially in the first quarter) due to successive waves of the pandemic.
Strong growth of the Modivo Group
The MODIVO Group (eobuwie.pl and MODIVO) reported a strong, 51% year-on-year sales growth. Its revenue rose from PLN 2.2bn in 2020 to PLN 3.4bn. The Group earned gross profit of nearly PLN 1.5bn in the reporting period (an increase of 49% year on year). For the entire financial year, the MODIVO Group posted PLN 207.6m in operating profit and PLN 269.4m in EBITDA. These results represent a marked year-on-year improvement of 46.6% and 39.3%, respectively.
“Throughout 2021 we consistently pursued our customer-centric strategy, while delivering strong revenue and earnings growth. We launched a new logistics centre in Bucharest, ensuring swift deliveries to customers in that part of Europe. We strengthened our international presence, winning over customers in more foreign markets. Eobuwie.pl already operates in 19 countries and our fashion brand MODIVO has a presence across 13 markets. We expanded our offline network to cover four more cities, including the Czech Prague. Altogether, we are now available at 30 locations with an omnichannel shopping experience and the same day delivery service. We have also begun technology work on new vital projects (including a store platform and mobile apps),” says Damian Zapłata, the MODIVO S.A. CEO. “Feeling very proud of our achievements to date, we will press on with our strategy focused on building the position of an online fashion leader in the CEE region. Further milestones lie ahead, including launch of the marketplace project scheduled for the second half of 2022, bringing new mobile apps to our customers and building organisational structures internationally. I am confident that with the experience and commitment of the CCC team we will achieve our goals”.
Sustainability at the CCC Group – 2021 summary
As every year, in parallel to the financial results the CCC Group also summarised its sustainability performance. All activities undertaken by the organisation stem from concern for the environment, society and employees. This is why a so-called ‘materiality survey’ was conducted among all stakeholders in 2021 to prioritise relevant actions. A sustainability agenda is now integrated into the GO.25 business strategy, featuring among its seven key strategic objectives.
“We managed to achieve the targets set in the CCC Group’s first Sustainability Strategy GO.22. One of the key ones was to reduce Scope 1 and 2 greenhouse gas emissions (that is direct and indirect emissions associated with purchased energy) by as much as 16.2% from the base year 2019, although the original target was a 5% reduction. Another notable achievement was to increase the share of leather sourced from certified LWG (Leather Working Group) tanneries in our manufacturing processes to 21% at the end of 2021 (relative to the original target of 19%). Having delievered on our targets, we are enthusiastically embarking on the new Strategy, in which we have set specific targets to be achieved by 2025 and our long-term ambitions for 2030, defining the CCC Group’s responsibility across four areas spanning products, the environment, employees and society,” adds Marcin Czyczerski.
The success of the CCC Group’s ESG efforts is confirmed by high ratings from independent international agencies such as MSCI, which again awarded the Group an A rating, placing it among the world’s leaders in sustainable development. The Group’s other achievements include promotion to the 2nd place within the footwear industry in Sustainalytics, the prestigious international ranking which evaluates companies on how well they manage their exposure to material ESG risks. What is more, the CCC Group was ranked 11th in Refinitiv’s Diversity & Inclusion index, ranking more than 11 thousand companies on their commitment to diverse and equal workplaces.
A summary of the Group’s Sustainability efforts is available HERE.