Modivo (MDV) Trading update summary

Financial outlook and guidance

• FY2025 revenue is now expected at PLN 10.9–11 billion, with EBITDA guidance revised to PLN 1.43–1.47 billion, both below previous estimates due to a weaker Q4 2025.

• Q4 2025 revenue was PLN 2.6 billion, about PLN 0.5 billion below expectations, mainly from weaker retail and e-commerce sales.

• Gross margin in Q4 2025 dropped by 3.5–3.7pp, impacted by inventory write-downs, increased promotions, and licensing fees.

• Cost control led to a PLN 80–100m reduction in variable and administrative costs, but EBITDA shortfall is estimated at PLN 180–220m.

• No official forecast for 2026 is being published, but ambitions remain high and significant improvement is expected.

Business performance and segment analysis

• Retail like-for-like was -1.9% in Q4, with e-commerce revenue down 23–24% due to a strategic shift to own/licensed products.

• HalfPrice sales grew 29% YoY to PLN 729m, with a strong gross margin of 51.5% and Q4 EBITDA margin at 18%.

• Modivo revenue dropped 24%, with a flat gross margin but negative Q4 EBITDA margin; full-year EBITDA margin at 8%.

• CCC omnichannel revenue was PLN 1.03bn, gross margin 59%, and Q4 EBITDA margin above 14%.

• Inventory per square meter decreased by 24%, reflecting improved inventory management.

Strategic initiatives and operational changes

• Retail space expanded by 28% YoY (36% including Worldbox), with 300,000 sqm added, especially at HalfPrice.

• Licensed and own brands now make up nearly 50% of the sales mix, up from 2% a few years ago.

• Investments in logistics, including a new warehouse for HalfPrice and scaling Modivo Club, aim to support growth and efficiency.

• Focus on extending supplier payment terms, optimizing working capital, and increasing use of trade finance.

• E-commerce strategy is shifting to prioritize profitability over volume, reducing reliance on third-party brands.