Wittchen (WTN) Q4 2023 earnings summary

Executive summary

• FY23 revenue rose 15.1% YoY to PLN 467.1m, led mainly by online sales; gross margin reached 63.5%, while net profit was PLN 61.3m, down 2.5% YoY.

• Sales increased strongly in H1; full-year operating profit and EBITDA fell as SG&A costs grew faster than revenue.

Financial highlights

• FY23 revenue was PLN 467.1m, up 15.1% YoY; gross profit margin was 63.5%, up 0.5 p.p. YoY.

• FY23 SG&A increased 30.1% to PLN 216.3m, or 46.4% of sales versus 41.0% in FY22; operating profit fell 11.4% to PLN 77.7m.

• FY23 net profit was PLN 61.3m, down 2.5% YoY; EBITDA was PLN 105.9m, down 6.3% YoY.

• Q4 revenue fell 3.2% YoY to PLN 132.3m; gross margin rose to 64.9% from 62.6%, while net profit declined 28.7% to PLN 20.7m.

• Q4 SG&A rose 15.8% YoY to PLN 59.1m; operating profit fell 25.3% to PLN 25.8m and EBITDA fell 18.8% to PLN 33.1m.

Outlook and guidance

• FY24 target is continued double-digit sales growth, with strict cost control, business-wide efficiency measures and a high, stable gross margin.

• Plans include opening two e-stores, reaching eight owned e-stores, expanding assortment and making greater use of the 46-marketplace network.

• Further international expansion is planned, including owned online stores in Austria and Germany in 2024 and potential growth through physical stores.

• From Q4 2024, a third 3,600 m² warehouse hall is planned at the Palmiry logistics center, alongside equipment changes and a new parcel-handling line to reduce external storage costs.