The CCC Group ends the fourth quarter of 2021 with revenue growth reported across all brands and rapid expansion of the omnichannel platform
The CCC Group ended the fourth quarter of the financial year 2021 (November 2021–January 2022) with a 46% year-on-year revenue growth, reporting sales in excess of PLN 2bn for a third consecutive financial period. E-commerce contribution to the Group’s revenue rose to 56%, reflecting mainly a growing number of online channels, digitalisation of offline stores and mobile app rollouts. The Group reported growth across all brands. In the reporting period, it also unveiled its new business strategy GO.25: Everything Fashion. Omnichannel Platform, aiming to achieve a threefold business growth by 2025 as one of its key goals.
In the fourth quarter, the CCC Group posted PLN 2.04bn in revenue, up 46% year on year. The share of e-commerce is steadily expanding, having reached 56% (+11pp quarter on quarter). The Group reported positive growth across all brands, with the new concept HalfPrice generating revenue of PLN 114m (+39% quarter on quarter) and DeeZee posting a 58% year-on-year increase in revenue, surpassing the PLN 100m full-year turnover mark for the first time in its operating history. CCC’s omnichannel sales per m2 of retail space improved by 4% on the fourth quarter of 2019. In line with the stated strategy, CCC stores are increasingly digital, becoming an extension of online retail operations.
In the last quarter of 2021, the Group’s gross margin rose almost 4.5pp year on year, with the strongest gross margin and growth reported for the CCC segment, led chiefly by active price management and consistent discount policy optimisation measures. Supported by those efforts, gross margin earned by the CCC segment in 2021 hit a four-year high, exceeding 53%. The segment also stands out for consistent improvements in its inventory structure.
The CCC Group’s costs rose 41%, slightly slower than revenue (+46%). The higher cost base was attributable mainly to investments made in the pursuit of the strategy GO.25: Everything Fashion. Omnichannel Platform.
‘To deliver on our new strategy, we are developing in-house capabilities while strengthening our technology, digital retailing, product and marketing communication teams. We have also implemented an order management system (OMS) to integrate in-store stocks with e-commerce operations, which helped to markedly improve the availability of our products for customers. Our stores in Poland have become logistics hubs – currently they ship more than 50% of domestic online orders. We are also expanding our HalfPrice network. In the past quarter, we opened 28 new stores and launched a dedicated e-commerce channel. We are consistently working to enhance the image and awareness of CCC own brands, placing a special focus on projects targeted at Generation Z. Examples include collaboration between Sprandi and a young female rapper Young Leosia, and the launch of the athleisure Universe capsule collection,’ said Marcin Czyczerski, President of the CCC Group Management Board.
The CCC Group ended the quarter with EBITDA of PLN 26m and operating loss of PLN -113m, showing year-on-year improvement of PLN 64m and PLN 53m, respectively.
The organisation also moved forward with its sustainability initiatives. The efforts implemented in the past quarter include development of the Circular Economy Roadmap containing ten circularity projects. The Group pursues numerous initiatives in this area, including a project which in the past quarter led to a significant increase in the number of CCC stores equipped with special containers for pre-owned shoes, designed to give footwear a second life and help reduce the environmental impact of footwear manufacture.
Full-year 2021 revenue totalled PLN 7.6bn, of which 51% was from online sales. Gross margin rose across all segments and improved at the consolidated level by more than 3pp year on year. Despite major restrictions on offline retail operations in the first quarter of 2021, the full-year operating profit improved by over PLN 500m year on year. The Group’s 2021 EBITDA reached PLN 508m (with EBITDA margin at 6.7%).
Modivo Group continues on a dynamic growth path
In the fourth quarter, the Modivo Group (eobuwie.pl and MODIVO) delivered strong revenue growth of 35% despite the challenging base effect of major restrictions on offline retail operations imposed in the fourth quarter of 2020. Sales in the MODIVO segment grew 123% year on year, accelerating for a third consecutive quarter (+95% and +109% in the second and third quarters of 2021, respectively). Also, revenue delivered by the brand nearly tripled in the promising European markets of Germany and Italy. MODIVO’s total contribution to revenue posted by the Modivo Group jumped to 22%, up by a strong 9pp year on year.
The Modivo Group’s growing costs (34%) reflected strategic growth. In the reporting period, costs grew at a pace similar to revenue (35%). Work on the MODIVO marketplace and new eobuwie.pl and MODIVO mobile apps is in progress. The Group has launched a new distribution centre in Romania and is currently in phase three of its project to expand the logistics centre in Zielona Góra. In a parallel effort, the Group is expanding local offices in its most promising markets.
'We are at a critical point in the Modivo Group’s growth. We have just finished the process of changing our name to MODIVO S.A., which is meant to signify new product development and our international aspirations. It’s also another step towards an IPO. The consecutive quarters of strong sales growth have confirmed us in the belief that we correctly identify customer needs and that our plans and related investments are on the right track. In line with our commitment to advancing ESG, we are the first e-commerce operator to introduce reusable packaging in partnership with InPost. The partnership will help reduce demand for disposable packaging even by tenfold,’ commented Damian Zapłata, President of the MODIVO Management Board.
On a full-year basis, the Modivo Group recorded a 50% year-on-year growth in sales (close to the 2019 and 2020 levels), delivering EBITDA of PLN 262m, which was above the target (PLN 230–250m) communicated at the beginning of 2021.
In the fourth quarter of 2021, the CCC Group unveiled its business strategy GO.25: Everything Fashion. Omnichannel platform. It targets a threefold increase in revenue, EBITDA margin of 12% plus, a 60% online contribution to sales, launches of new product categories, improved customer satisfaction, employee engagement and ESG-driven company development.
