Modivo (MDV) Q3 2024 earnings summary

Executive summary

• Q3 2024 operating profit more than quadrupled year-on-year, with EBITDA up PLN 256m YoY to PLN 485m, marking a record-breaking quarter.

• Revenue increased 14% year-on-year, with margin up three percentage points; all brands contributed to the improvement, especially HalfPrice and MODIVO.

• CCC Group continues to execute a profitability improvement plan, achieving record gross margins and strong like-for-like sales growth.

• Expansion of licensed brands and omnichannel model are key drivers of growth and profitability.

• Preliminary consolidated financial data for Q3 2024 (August–October) released, providing an early view of performance compared to Q3 2023.

Financial highlights

• Q3 2024 EBITDA reached PLN 485m, up PLN 256m YoY, just PLN 15m short of the company's all-time high.

• Group revenue in Q3 2024 totaled PLN 2,768m, up 14% YoY, with Poland contributing 59%.

• CCC segment gross margin hit an all-time high of 59.5% in 9M 2024, up from 55.4% in 2023.

• Net debt in the CCC business unit decreased by 44% quarter-over-quarter, supported by higher cash and extended supplier payment terms.

• 70% of inventories are now financed by liabilities, with a goal to reach 100%.

Outlook and guidance

• The company targets a 20% EBITDA margin and PLN 12 billion in revenue for next year.

• Targeting retail space growth to 2,200k sqm by 2030, nearly tripling from 2023 levels.

• Plans to open over 200,000m² of new retail space annually, focusing on Central and Eastern Europe and entry into Southern European markets.

• Ambitious goal to reduce inventory by PLN 300 million over the next two to three quarters.

• Key strategic targets include >12% Group EBITDA margin and 48-50% gross margin by 2025.