Modivo Sa · GPW:MDV
Modivo Sa — CCC Group — Q3 2024 Earnings Presentation
91 slides from Modivo Sa's earnings presentation, Nov 14, 2024
Slide 1: CCC Group Q3 2024 Results
CCC GROUP Q3 2024 RESULTS DARIUSZ MILEK LUKASZ STELMACH Warsaw, 14 November 2024 EWA CHODAKOWSKA, is ie ee REEBOK BRAND AMBASSADOR F vs
Slide 2: The Group's operating profit more than doubled year on year
THE GROUP’S OPERATING PROFIT MORE THAN RUPLES YEAR ON YEAR PLN +253m YoY EBITDA
Slide 3: Industry-leading EBITDA margin delivered by the CCC business line
Slide 4: HalfPrice's EBITDA margin unmatched by off-price segment globally
HALFPRICE’S EBITDA MARGIN UNMATCHED BY OFF-PRICE SEGMENT GLOBALLY 21%...
Slide 5: Fast-paced work to enhance the Modivo Group's performance
FAST-PACED WORK TO ENHANCE THE MODIVO GROUP’S PERFORMANCE 10%... EBITDA MARGIN
Slide 6: Sharp deleveraging
SHARP DELEVERAGING -44%.. NET DEBT OF THE CCC BUSINESS UNIT
Slide 7: CCC Group Business Model
CCC GROUP BUSINESS MODEL
Slide 8: Globally unique multibranded omnichannel model
GLOBALLY UNIQUE MULTIBRANDED OMNICHANNEL MODEL -————_ OMNICHANNEL E-COMMERCE —— CCC eobuwiesi [worldbox; ——> MODIVO OFF-PRICE — HalfPrice
Slide 9: Consistent pursuit of the Group's profitability improvement plan
CONSISTENT PURSUIT OF THE GROUP'S PROFITABILITY IMPROVEMENT PLAN 485 407 224 EBITDA [PLNm] I I I I I I I I I I I l i} I I 89 I I I Q12023 | Q22023 Q32023 Q42023 Q12024 22024 a32024 EBITDA margin and LTM EBITDA of the CCC Group [%.
Slide 10: CCC as the Group's main profitability driver
CCC AS THE GROUP’S MAIN PROFITABILITY DRIVER 9M 2023: 16% 21 19 Q12023 , Q22023 Q32023 Q42023 I EBITDA margin and LTM EBITDA of the CCC segment [%] 9M 2024: 24% (+8pp YoY) Q12024 26 LTM EBITDA MARGIN EBITDA MARGIN Q22024 Q3 2024
Slide 11: All-time record gross margin levels delivered by CCC
ALL-TIME RECORD GROSS MARGIN LEVELS DELIVERED BY CCC AND STRONG LFL SALES FUELLED BY LICENSED BRANDS 9M 2024LFL(PLN) +13% 9M 2024 LFL(LOCALCY) +17% 55.5% 55.4% 53.7% J, 9M OM 2023 2024 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20222023 Gross margin inthe CCC segment [%]
Slide 12: Strong profitability upside ahead, underpinned by new licensed brands
STRONG PROFITABILITY UPSIDE STILL AHEAD, UNDERPINNED BY NEW LICENSED BRANDS BRANDS OFFERED BY CCC BRANDS TO BE OFFERED FROM SS25+
Slide 13: Reebok
Slide 14: Reebok
Slide 15: Reebok
Slide 16: Juicy Couture
Slide 17: Juicy Couture
Slide 18: Juicy Couture
ESTLDS ANGELES A 1996
Slide 19: Juicy Couture
Slide 20: Nine West
Zz (e) Qa el =. 14 Lu = Z =) ae
Slide 21: Hunter
HUNTER Est. 1856
Slide 22: Nine West
Slide 23: MEXX
MCXX AMSTERDAM Est. 1986
Slide 24: G-Star
Oo © fo2) = Est.
Slide 25: G-Star
INSIDE THE RAWEACTORY ‘SCANNED MV OBJECTS, Est. 1989
Slide 26: G-Star Amsterdam
Slide 27: Gino Rossi x Marilyn Monroe
Slide 28: Gino Rossi x Marilyn Monroe
Slide 29: SHAQ
Slide 30: SHAQ event
Slide 31: Kappa
Slide 32: Kappa
Est. 1967
Slide 33: Kappa
Slide 34: Sportowa klasyka
SPORTOWA KLASYKA TRADYCJA | ELEGANCJA RETRO DESIGN Pe ® f BEVERLY HILLS POLO CLUB
Slide 35: Beverly Hills Polo Club
Slide 36: Beverly Hills Polo Club
Est. 1982
Slide 37: Billabong
Est. 1973
Slide 38: Billabong
Est. 1973 & AN A
Slide 39: Billabong
Slide 40: Billabong
Est. 1973
Slide 41: Quiksilver
RuIkKSilwse Est.1969.
Slide 42: Quiksilver
Slide 43: Roxy
Est. 1990
Slide 44: Roxy
Slide 45: Roxy
Est. 1990
Slide 46: Roxy
zt o (2) A oe] 7) Ww
Slide 47: DC Shoes
Est. 1994
Slide 48: DC Shoes
Slide 49: DC Shoes
Slide 50: Nautica and Spyder
Slide 51: Fast growing proportion of licensed brands in the CCC portfolio
FAST GROWING PROPORTION OF LICENSED BRANDS IN THE CCC PORTFOLIO 4% Licensed brands 74% 9 62% Ml sex 50% ule Private labels 22% % © w% ie 15% uley) Partner brands FY 2023 H1 Q3 H1 H2 2024 2024 2025 2025 Shares of the respective brand categories in the CCC segment’s revenue [%] GROSS MARGIN* 9M 2024 T
Slide 52: Robust gross margin on licensed brands when full-price stocks transferred to HalfPrice
ROBUST GROSS MARGIN ON LICENSED BRANDS WHEN FULL-PRICE STOCKS TRANSFERRED TO HALFPRICE CASE STUDY PRIVATE LABEL OR LICENSED BRAND SELLING COST OF PRICE SALE MARGIN FULL-PRICE PLN 100 PLN 22 78% | OFF-PRICE PLN 60 PLN 22 63% (PRICE -40%) POST-SEASON TRANSFER TO | OFE-PRICE PLN 50 PLN 22 56% (PRICE -5
Slide 53: License partnerships as an upside potential for other business lines
LICENSE PARTNERSHIPS AS AN UPSIDE POTENTIAL FOR THE GROUP’S OTHER BUSINESS LINES Stock transfers from the Group’s other business lines Private labels TARGETED PRODUCT Licensed brands MIX IN THE GROUP’S RETAIL, 100% MULTIBRANDED FORMATS (EXISTING & NEW ONES) Partner brands HalfPrice (x) BOARDRIDERS.
Slide 54: Product segmentation strategy capturing brand value across price points
PRODUCT SEGMENTATION STRATEGY AIMING TO CAPTURE BRAND VALUE ACROSS ALL PRICE POINTS CORE PRICE SEGMENT STORES SYNERGY Speciality Top Value 30 MODEL TOP $$$$ PREMIUM en pearel $$$ Value ? eobuwiepl a $$ Value 200 @ BOARDRIDERS Action Sports $$ Value 100 CCC Family Footwear $ Volume 1,200 FOCUS i A .
Slide 55: Return to growth in retail space
RETURN TO GROWTH IN RETAIL SPACE FOCUS ON THE EXPANSION OF PROVEN & PROFITABLE SALES FORMATS Potential to almost triple retail space by 2030 (vs 2023) - from 790k sqm to 2,200k sqm Floorspace growth of 200-250k sqm a year Estimated capital expenditure of ca. PLN 300-400m a year, to be financed mainl
Slide 56: Expansion concentrated in CEE with southern Europe opportunities
THE CCC GROUP’S EXPANSION TO CONCENTRATE IN CEE, WHILE SEIZING OPPORTUNITIES ON PROMISING SOUTHERN EUROPEAN MARKETS OFFLINE & ONLINE KEY REGION OFFLINE OPPORTUNITIES
Slide 57: Strong profitability of CCC and HalfPrice offline stores
STRONG PROFITABILITY OF CCC AND HALFPRICE OFFLINE STORES WITH POTENTIAL FOR FURTHER GROWTH EBITDA MARGIN OF CCC STORES IN Q3 PAYBACK PERIOD FOR H CCC STORE: f ' UP TO 6 MONTHS i 2024 [%] 41% QoQ change pp Poland SHARE OF SALES Q3 0 2024 65% POPULATION IN THE 38 REGION (MILLION) 28% -3pp Foreign mark
Slide 58: Retail space growth driven by existing and new formats
THE GROUP’S RETAIL SPACE GROWTH DRIVEN BY EXISTING & HIGHLY PROFITABLE FORMATS AS WELL AS NEW, COMPLEMENTARY BUSINESS CONCEPTS AVERAGE CURRENT | POTENTIAL STATUS # STORES # STORES STORE AREA [SQM] HalfPrice | Already existing 140 500 2,300 CCC Already existing 800 1,200 700 eobuwiep! Nisw Gis 50 200
Slide 59: CCC store network: 800 stores, 1,200 targeted by 2030
Slide 60: Current and targeted number of stores
ae eT a iH if a Current # of stores: 1 4 Targeted # of stores by 2030: 50 O ay | “~ ee a ol A ——
Slide 61: Sound and repeatable profitability of HalfPrice after 3 years
SOUND AND REPEATABLE PROFITABILITY PROFILE OF HALFPRICE AFTER ONLY 3 YEARS SINCE LAUNCH 9M 2023: 7% 9M 2024: 20% (+13pp YoY) 21 LTM 20 EBITDA MARGIN 14 EBITDA MARGIN 3 1 Q1 2023 Q2 2023. =Q32023 Q42023 Q12024 = Q22024 32024 EBITDA margin and LTM EBITDA of the HalfPrice segment [%]
Slide 62: HalfPrice's outstanding performance vs global competitors
HALFPRICE’S OUTSTANDING PERFORMANCE VS GLOBAL COMPETITORS MARKET CAPITALISATION 133 17 48 [USDbn] MARKET CAPITALISATION/ 18x 17x 16x EBITDA* MARKET CAPITALISATION/ 28x 40x 23x 19.8 20.1 NET PROFIT 18.0 AVERAGE FOR COMPETITOR 14.5 CHAINS 13.0 12.4% _____._ [MM -_______.________.---- 3 --.--------.---
Slide 63: Untapped off-price market in Europe
UNTAPPED OFF-PRICE MARKET IN EUROPE... SHARE OF OFF-PRICE IN RETAIL SALES 12-18% 4-6% 1-2% US UK DE Source: Study conducted by the Company's adviser GEOGRAPHICAL COVERAGE OF THE EUROPEAN OFF-PRICE MARKET CENTRAL EUROPE (CE)
Slide 64: Huge growth potential
.-«e WITH HUGE GROWTH POTENTIAL PRESENTING A UNIQUE OPPORTUNITY FOR HALFPRICE GDP AND POPULATION CENTRAL AND NUMBERS, WESTERN EUROPE USA VS EUROPE POPULATION . (MILLION) 5 USA GE 10% d CENTRAL EUROPE (CE) GDP ‘ eee 22.9 21.6 . 67 ” nn 83 V7x—q 1 151 [eg 67 8 fo) fe) PQMILLION) | 391 GB 10 47 USA EU
Slide 65: HalfPrice's expansion in Western Europe
HALFPRICE’S EXPANSION IN WESTERN EUROPE TESTING OF THE PROVEN AND PROFITABLE SALES FORMAT IN SELECTED LOCATIONS HALFPRICE’S ROLL-OUT INTO SPAIN Why we believe in HalfPrice’s success in Spain and selected Western European markets: * Global, internationally recognisable brands No off-price concepts cu
Slide 66: Rapidly growing recognition of HalfPrice
RAPIDLY GROWING RECOGNITION OF HALFPRICE BRAND AWARENESS COMPARABLE TO A COMPETITOR WITH NEARLY 20 YEARS OF MARKET PRESENCE May 2021 May 2022 HalfPrice brand recognition [%] Source: IAS study Jul 2022 Dec 2022 May 2023 Apr 2024 98 31 # SHOPS POLAND # SHOPS ABROAD
Slide 67: Worldbox: current and targeted stores
{ | py) : ’ P } } a J —— be aa le wy = <7 cea us Current # of stores: 1 boy @) d argeted # of stores by The Group holds a 10% stake in kaes and has signed a franchise agreement to develop Worldbox chain
Slide 68: Worldbox product mix
— Tel PRODUCT MIX 60% APPAREL / 20% FOOTWEAR / 20% ACCESSORIES 2-3 aos — -
Slide 69: Licensed brands, partner brands and private labels
r | .worldbox, prooooaossasorssssasssssr=acoR9¢ LICENSED BRANDS ~~ ~~ ~~ ~~~ ~~~ ~ >= ===> 2207-222 --- reset AU aime SHAG Ka TE Roxy zeae verve Kappa) QUIKSILVER DeSHOECOUSA az NAUTICA |HUNTER af Juicy Coutre MEXX G-STAR BEVERLY HILLS. eee PARTNERBRANDS ------------------------------- ' * MS. puma’
Slide 70: Leveraging licensed brands to boost profitability across sales formats
LEVERAGING LICENSED BRANDS TO BOOST PROFITABILITY ACROSS ALL OF THE CCC GROUP’S SALES FORMATS 99.00 159.00 60.00 59.50 Pee BETALPRICE USD 2.15 (COST OF SALES PLN 11.50 GROSS) | RETAIL PRICE | (PLN) !
Slide 71: Current number of stores
Current # stores: 1 5
Slide 72: Current number of stores
Current # stores: 50
Slide 73: Targeted number of stores by 2030
... towards in-store proc Targeted # stores by 2030: 20 O
Slide 74: Juicy Couture
Juicy Couture
Slide 75: Strategic bet on brick&mortar channel expansion
STRATEGIC BET ON BRICK&MORTAR CHANNEL EXPANSION WITH FLAT SHARE OF E-COMMERCE IN RETAIL SALES = Share of online sales — Average share of online sales - textiles Share of online sales - textiles 2022 2023 2024 The overall share of online sales and the share of online sales in the textiles, apparel, a
Slide 76: Realities of European e-commerce
REALITIES OF EUROPEAN E-COMMERCE: SLUGGISH REVENUE GROWTH, LOW MARGIN, RISING OPEX LTM CompetitorA CompetitorB Competitor C Revenue EUR 10.3bn GBP 2.9bn PLN 1.3bn owt? 0.7% 16.4% 15.7% Gross margin 40.0% 43.4% 38.9% EBIT margin 3.6% -2.8% -0.1% EBITDA margin 6.8% 2.7% 1.4% Financial data of fashion
Slide 77: Development of retail formats alongside online restructuring
DEVELOPMENT OF RETAIL FORMATS ALONGSIDE ONGOING ONLINE BUSINESS RESTRUCTURING Modivo’s road to becoming the most profitable e-commerce player in Europe VENUE Q3 2023 Q3 2024 New CEO since mid-September 2024 Gross margin 38.1% 42.8% 4.7pp Cost-cutting initiatives implemented SG&A 44.2% 35.7% -8.5pp P
Slide 78: Further profitability improvement drivers for Modivo
FURTHER PROFITABILITY IMPROVEMENT DRIVERS FOR MODIVO - E-COMMERCE SUPPORT FOR ALL BUSINESS LINES OF THE CCC GROUP COUPLED WITH GROWING SHARE OF PRIVATE LABELS AND LICENSED BRANDS IN PRODUCT PORTFOLIO PRIVATE LABELS TOP PREMIUM 40% LICENSED BRANDS Group’s online sales conducted by: MODIVO eobuwie pl
Slide 79: Traffic acquisition optimization for online profitability
TRAFFIC ACQUISITION OPTIMIZATION AS THE MAIN TOOL FOR THE RAPID ONLINE SEGMENT PROFITABILITY IMPROVEMENT SOURCES OF TRAFFIC ACQUISITION PERFORMANCE MARKETING TVAD CRM SUBSCRIPTIONS MOBILE APP PRODUCT OFFER PRICE RANGE VOLUME MEDIUM PREMIUM OO G9 OF eo w oO 9 Oe eo QO O@ Oe x0 © ®@ @ 2 -|
Slide 80: Strengthening the CCC Group's leadership
STRENGTHENING THE CCC GROUP’S LEADERSHIP TO SUCCESSFULLY EXECUTE THE GROWTH STRATEGY woe DEVELOPMENT AND OVERSIGHT OVER DELIVERY OF THE __._ ' CCC GROUP’S STRATEGY St) Jamie Salter Dariusz Mitek Chairman of the CCC Strategy & Development } 1 f f f f Founder, major H f Committee a f f f f f f f f f s
Slide 81: Delivery of key strategic targets
Slide 82: Delivery of key strategic targets
Slide 83: Proposal of a 5-year bonus program beneficial to all shareholders
Slide 84: Summary of the CCC Group's key strategic priorities
Slide 85: CCC Group omnichannel business model
Slide 86: Thank you
Slide 87: Support material
Slide 88: CCC Group revenue in Q3'24
Slide 89: Geographic availability of CCC Group stores
Slide 90: Slide 90
Slide 91: CCC Group brands