Modivo (MDV) Q4 2024 earnings summary

Executive summary

• Group achieved rapid EBITDA margin improvement, reaching 18% in 2024, with targets of 20% next year and 25% in 2025, driven by operational restructuring, cost-cutting, and a focus on high-margin licensed and private label brands.

• Revenue increased 9.1% year-over-year to PLN 10,302.8 million, with net profit of PLN 956.9 million, and group revenue for Q4 2024 at PLN 2,871 million, up 14% year-over-year.

• Gross margin improved to 50% from 47% year-over-year, supported by retail recovery and digital growth.

• Launching a unified loyalty club and consolidating e-commerce under the MODIVO platform to enhance operational efficiency and customer retention.

• No dividend was paid for the period; a new dividend policy and management incentive scheme were adopted post-period.

Financial highlights

• Annual EBITDA improved by 10pp, with HalfPrice achieving 23% EBITDA margin, MODIVO moving from -6% to 12% EBITDA, and CCC segment at 22% for FY 2024.

• Revenue from new specialist stores reached PLN 220 million, with 28% from e-commerce and an average ticket value of PLN 600.

• Cost savings in logistics, IT, and HR expected to yield over PLN 300 million annually; refinancing improved debt structure and reduced costs.

• Operating cash flow reached PLN 1,311.9 million, supporting a net cash increase of PLN 194.7 million.

• Inventory reduced by 8% quarter-over-quarter, with inventory turnover targeted at 180 days.

Outlook and guidance

• Group targets over PLN 12 billion in revenue and 20% EBITDA margin by year-end, with plans to open 250,000 sq m of new retail space and expand to 208 locations by 2027.

• Modivo aims for revenue of PLN 3.6 billion and EBITDA margin of 15% in 2025, expanding to 20% by 2027.

• Inventory reduction target to PLN 3 billion, even as business grows by 20%.

• New dividend policy targets 25–66% payout for FY2026 and 50–66% for FY2027–2029, subject to leverage limits.

• Management expects continued compliance with financial covenants and ongoing access to credit lines.