The CCC Group posts another quarter of strong EBITDA margins delivered by CCC (20%) and HalfPrice (19%)
In the final quarter of 2023, spanning from November 2023 to January 2024, the CCC Group recorded its highest quarterly revenue to date at PLN 2.5bn. HalfPrice led as the Group’s fastest-growing segment, boasting a 53% year-on-year growth. The period saw a notable enhancement in the Group’s EBITDA margin, up by 6pp year on year, largely driven by a sharp rise in gross margins in the CCC and HalfPrice segments, coupled with effective cost saving measures, all amidst a gradual recovery in consumer purchasing power. Concurrently, the Modivo Group successfully executed a key strategy for profitability by reducing and optimising inventory levels.
The CCC Group’s revenue for the fourth quarter of 2023 stood at an all-time high of PLN 2.5bn, achieved even against the backdrop of e-commerce sector challenges and diminished sales for the Modivo and e-obuwie.pl business lines, attributed to less-than-optimal inventory management. HalfPrice remained the principal contributor to growth, reporting a 53% year-on-year growth.
In the quarter under review, the Group recorded a sharp rise in gross margin (up by 4pp), to 46.7%, primarily fuelled by significant growth in the margins of the CCC and HalfPrice segments (up by 8pp and 6pp year on year, respectively).
‘This quarter has been solid in terms of sales and results, yet we aim higher. Our objective is to continuously enhance profitability across all our business lines,’said Dariusz Miłek, CCC Group CEO. ‘We hope 2024 will see a steady recovery in consumer purchasing power. With inflation slowing down and household spending on the rise, we anticipate a favourable environment for growth. We’re ready to fully leverage this favourable climate across all our business lines.’
‘In 2024, we are targeting double-digit sales growth for the Group, gross margin improvements across all lines of business, unwavering cost discipline, elevated EBITDA profitability in each business line, and a reduction in finance costs,’ Mr Miłek added.
In the reporting quarter, the CCC Group delivered an operating profit of PLN 96m (up by PLN 147m year on year) and an almost threefold year-on-year increase in EBITDA. The CCC segment posted a sharp rise in EBITDA margin for another consecutive quarter, surpassing the 20% mark. HalfPrice recorded an over fivefold year-on-year increase in operating profit for the past quarter.
‘Key to bolstering CCC’s gross margin were its compelling product lineup, the refined scale and structure of promotional activities, and improved terms for new collection purchases. These efforts, combined with tight cost control – evidenced by a 12% year-on-year reduction in costs and marking the sixth consecutive quarter of cost ratio improvement – paved the way for the double-digit operational profitability. Despite its relative infancy and rapid growth phase, HalfPrice has already exceeded our initial profitability expectations. With the Modivo Group entering the new year with a significantly healthier inventory profile, we are confident in our path toward sustained profitability,’ concluded Dariusz Miłek, CCC Group CEO.
The Modivo Group’s profitability remained under pressure from the inventory optimisation programme. In line with earlier announcements, the Group’s inventory was below PLN 1bn. The age structure of the inventory also improved, with the latest collections accounting for over 84% of total inventory (up 17pp year on year). Pre-season pickups of goods from the spring-summer collection were also faster and more efficient compared to last year.
