Modivo (MDV) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered record revenue of PLN 2.574 billion, up 6% year-on-year, with strong cost discipline and margin improvements across all business lines.

• Net profit reached PLN 305.0m, a turnaround from a PLN 137.1m loss in the prior year.

• Like-for-like sales rose 12%, with HalfPrice leading growth at 23% and CCC at 7%.

• Fast-tracked expansion plans for HalfPrice and CCC, leveraging proven, profitable formats.

• Gross margin improved by 4.6pp to 50.5%, reflecting a broader product portfolio and lower discounting.

Financial highlights

• Group EBITDA reached PLN 401 million in Q2, with a margin just under 16%, up nearly 6.5 percentage points year-on-year.

• Operating profit increased by 214% year-on-year to PLN 249 million in Q2.

• Gross profit increased 16% to PLN 1,273 million, with gross margin up 4pp to 49.5% in Q2.

• EBITDA more than doubled to PLN 707.4m for the period, with CCC and HalfPrice as key contributors.

• Cash flow from operations was PLN 256.0m, with CapEx at PLN 177.5m.

Outlook and guidance

• Ambitious expansion plans include opening at least 50 HalfPrice and 50 CCC stores annually, targeting 130,000 sqm of new retail space per year.

• CCC Group retail space expected to grow 20–25% annually from 2025–2029, mainly via HalfPrice and CCC.

• Inventory increases support ambitious sales goals and expansion, with significant new store openings planned for H2 2024.

• Management expects to meet new syndicated loan covenants and sees no significant going concern risks.

• Trading update: August–September 2024 revenue up 19% year-on-year, with strong sales and margin momentum.