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 in Q3 2024, with margin up three percentage points; all brands contributed, especially HalfPrice and MODIVO.

• Net profit reached PLN 463.4 million, a turnaround from a PLN 154.1 million loss in the prior year.

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

• Cost-to-income ratio improved to 39%, surpassing the 40% benchmark.

Financial highlights

• Q3 2024 EBITDA reached PLN 485m, up PLN 256m YoY, and was 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%.

• 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%.

• Net cash from operating activities increased 21% to PLN 993.7 million.

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.

• Strategy includes increasing the share of licensed brands to 35% in H1 2025 and 50% in H2 2025.

• No formal profit guidance was published.