Modivo S.A. (MDV) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I hope you can hear us. I'd like to welcome you very cordially to the presentation of the preliminary estimated results of CCC. I'd like to welcome the Supervisory Board Chairman. My name is Marcin Czyczerski. I will have the pleasure of walking you through this presentation. Most recently, we met at the end of October. We had some good humor because we know that the fall and winter collection was enjoying a lot of recognition amongst the customers. We had seen how September finished up and what was happening in October. We note that this collection was the driving force for the sales results even though we had 2 lockdowns. We're all the more pleased because the collection we're talking about is one that we had fought for so strongly when the lockdown got started, when we didn't have enough means to contract that collection. This collection is the outcome of nearly 2 years of work, a lot of reorganization in the company in terms of the breadth and the width of the offer, the quality, communication with customers. So this collection -- the strength of e-commerce is something that has delivered our Q4 results despite the external mitigating circumstances we had as a group. We completed the year -- the quarter with slightly positive results. As of 1 February 2021, we will start a new financial year. So this will go from 1 February 2021 to 31 January. That's what our looks like -- that's what our trading calendar looks like in terms of the various collections, and this is more aligned to the life cycle of our collections. This will make it easier to be more -- to communicate with you better. And then as we compare year-to-year, we're going to meet to do that twice in this quarter to compare the 3 months of 2020 to the last 3 months of 2019. But then onetime, we'll have a 4-month quarter and we'll have a 13-month year, and then we'll be able to follow a 12-month year starting from the 1st of February. Let's try to sum up the quarter. We had very warm reception of our collection and a good beginning to Q4, so the revenue was up year-on-year. despite the second and third wave of the pandemic. So we continue to see major growth in e-commerce growing by leaps and bounds. eobuwie was doing very well. We had a stable liquidity situation, and we are very well prepared to the Spring and Summer collection. And so the company, through its operations, has shown that it's agile and it's capable of changing to meet the needs in the environment and to take advantage of the opportunities and chances out there. So what did Q4 look like? 4Q -- Q4 started very good for us. So we had high growth in the online and off-line channel. So this was -- we had like-for-like sales that were in the high double digits. And so primarily because of the strength of e-commerce and the conversion in the stores, which we're operating in Q4, led to the very good results. What was characteristic? If we look at Poland itself, we can see with respect to the retail business that in 2020, that we've doing been better than our competition with the exception of 1 month. So in retail, in Poland, in September, our growth rates were higher than the competitions by some 8 percentage points, in October by 10 percentage points and December by 26 percentage points, and you can see all this in the results of Q4. So you can see our retail is doing a bit better than others despite the tough environment. You see the results of e-commerce, and so you see a very high-growth rate in November where we had the lock down. And so our e-commerce channels had triple-digit growth having taken advantage of the Black Friday. So if we look at how we've managed on the various markets, I'm going to try to illustrate this based on the Polish market. Despite the lockdown in the Polish market in November, we had flat revenue. And how was that possible having 9 stores being closed for 3 quarters of a month? So our revenue was down by 54% of the PLN 100 million, and this is a result of shopping malls being closed down. Hence, this is a very difficult to adjust event. But that would have been even more pronounced had we not basically dedicated that through store openings in other parts. And so you can see that the product offering that we have in stores that are open, these products defend themselves and enable us to perform well through these retail parts of 150 stores there. So we were able to offset almost entirely through our e-commerce in CCC as well as the ones that we have through other brands like eobuwie, MODIVO sold. This, taken together, meant that in November, even though this was the most profoundly affected month in terms of the pandemic, we were able to have essentially a flat result. So on the next slides, we'll say a little bit about the prospects from our strategy. So product, above all, this is very important. It might sound trivial, but for every organization, it should be the heart of every organization. And it should be the way in which we show the value and our relationship to the customers. So if you look at our sales and you can see and observe in our stores and as well in our sales results what's happened in Q4. We have 6 limited capsule collections for the first time in our history. We see that our sales are growing very strongly, also on eobuwie because we have also the brand, CCC, presented there. And we have more than 500 brands being sold through eobuwie. So if we can have better performance on that platform, we treat this as a litmus test for the CCC brand versus brands of competition and we can see that the customers really appreciated this in Q4. And then we also had the DeeZee debut on the 6th of December, also MODIVO. Then we have another debut in the near future coming up with this brand in the fall -- in the spring, so an apparel product. So we have the next few slides which show you a little bit about how our products have changed. You can see the various brands. So they have a very strong identity, very specific communication. Their display tells you all of the important elements about them, starting with like, Gino Rossi, the capsule approach here. So we have minimalism, mobility, simplicity, high quality, a great level of integrity. And basically, these are slide shots that really reflect those values. And this is something that has been well received by our customers. Then we have the Jenny Fairy brand, which is basically an apparel brand that doesn't have any fears or isn't frightened at all in terms of looking for new trends, new approaches, and so it's growing very strong in ourselves. Then you have Lasocki, which on the other side, shows the craft, the Polish craft, the traditional approach, a multidimensional approach, a multigenerational approach. Having in mind also the Christmas period, we had that sort of -- this Christmas period, we had some top models of female and male models that participated in that session. Then again, we have Jenny Fairy in a soft volume approach, which is also available in our stores. And this also draws upon the current trends. These are the changes that have been taking place. This is how we're portraying and displaying these brands. We can see that the reception is very good. We're capable of communicating this. We are the leader in terms of share of voice on the various markets. So our position, we had lost in 2019, we drew conclusions from that. And we're in the top 3 in every month of the fourth quarter in terms of number of publications and reaching the top Polish media where we can say that this fashion aspect has been noted and it's been positively received. We have also micro-influencers involved, and then we can see a lot of trends that are underpinning the new CCC and the products we have to offer. We're also having in mind customer experience, the user experience. So I give the floor to Karol now.

So in Q4, we did a lot of redesign in terms of how we show the pictures of our products. So it's a high-quality style to emphasize the value, the very specific elements of the various products. And we can see that the conversion utilizing these pictures is substantially higher, new descriptions of the products. So basically, we're trying to touch this up, both within CCC as well as in eobuwie. So we can say that this is all happening above expectations. If we talk about the customer take-up, our customers like the idea of delayed payments, another thing that's happening in the background that's also important in Q4 and that will contribute to the quality of the descriptions. We give to customers, on various landing pages, this is the theme, common or shared product base. It's the same one for the entire group. And this should serve content well in the future, and it should do it in a way that will maintain quality. We also have a visual search. We've communicated this a few times. But we're going to want to promote this amongst the customers because this increases the conversion, and it goes up several times compared to the traditional traffic. So customers who use this functionality are frequently purchasing, making purchases. So this is something we've shown them in Q4, and this is something that will continue to advance, promote. The subsequent -- on the next slide, we're talking about omni-channel, which, in the most recent quarter, is something that we continue to develop. And so we have nearly 3.5 million downloads of the application. So on average, we have roughly 1 million customers who utilize our mobile application, so many times more than in the social media. So what we're endeavoring to do is to ensure that the interaction with our mobile app is highly personalized. And if you have the opportunity to utilize our app, you can see a lot of the changes that we made, the tweaks that we made in Q4. We've introduced the opportunity to experiment for ultra-fast deliveries within an hour or 2. And we can say that this test has been positive on the operational side of things. We can say that everything has been fully fleshed out, and so we're going to be able to promote it amongst the customers, and so we have very good economics. It's not much worse than the normal courier, so it's in a location that's close to where the customer is. Others are much behind us here. So the figure you see here at the bottom, the 20% is a very important figure for us. We can see how many customers, for the first time, have bought from us in a digital manner, so our digitized customers over the next year. And we're testing cohorts, their spending, on average, more than half as much as the traditional customer who visits the store. So we have the glass that's even more than half full because we have a potential that's 4x greater in terms of our omni-channel approach, and this is something that we're focusing on. So we had 20% in Q4, and we would like, every day, to ramp that figure up. On the next slide, one other important picture about the changes we will roll out. It's an important project. This is a tool that we're going to show to our customers, in the first quarter, in terms of refreshing the image of CCC as well as discounts, rebates that are equally attractive for customers in the CCC Club, and you'll be able to see some of the details. This is a big thing, which should enable us to reduce the average level of rebates or discounts over the course of the year. Here, on this slide, we want to talk about e-commerce, having a broad number of aspects, and we've developed it quite a bit. We've looked at additional shipping opportunities from Polkowice in our central -- in our warehouse. And this give us more flexibility, the ability to deliver quickly and to service other markets besides the ones we have at present directly from Zielona Gora where that warehouse is located. So we've also seen very strong growth in DeeZee year-on-year. And then in the Top Model campaign that we utilized and the organic growth. In Q4, another important thing that happened in DeeZee was the introduction of apparel in the offer. So this is a brand that's maturing, and it's growing very rapidly. And so we hope that it will continue to grow this year and next year. So then we have another 10 new landing pages that we want to introduce in CCC eobuwie. So in terms of the window shock, as it were, and this will push us forward in terms of e-commerce as well as in terms of digital sales in subsequent quarters.

Okay. Thank you very much, Karol. So product, e-commerce, omni-channel-ness and customization to what's happening on the market. That's what we can say to sum up, how we've operated in Q4 and how we're going to continue operating in 2021. So if we look at the initial preliminary estimated financial results, these are 3-month results. After we close up January, we'll publish the 4-month results. We'll start with the floor space. We've indicated to you that we've revised our plans in terms of our strategy of having 60,000 square meters. And so there's quite a bit of uncertainty because of the pandemic, the lockdown, what's going to happen in country because of the pandemic. So we've also made a lot of progress in e-commerce. So we've increased the floor space by 14,000 square meters year-on-year. So historically, this is the lowest increase. So this took place, above all, in Romania and Slovenia, in places where we'd said this is going to happen. Then we have hybrid store channels, MODIVO and [indiscernible] as we had indicated previously. You could also see quite a large number of closings, some 30,000. This is more than stores in their various formats. And so the entire group is aligning itself to the conditions we have to operate in. At the same time, we've seen a continuation in the dynamic growth of our online channel, so we would have more geographics, new points of contact with our customers. Now we have more than 70. So in Q4, we had some 52% growth or 52% of e-commerce the whole year, some 40%. And this is a result of the high-growth rate of e-commerce. So in Q4, it grew by 84%. What's important to note here and to emphasize that the stores that we're actually operating, some ahead, roughly minus 10%, minus 12%. So they did much better as opposed to what we derived directly from traffic in terms of the time that they're open. So e-commerce is very strong. So it's got some 50% share of sales. So 28% of e-commerce sales comes from different channels than eobuwie, so Gino Rossi, MODIVO, DeeZee. And they will continue to grow because this is an example of our progressing monetization of various channels, and this is something that we continue to draw your attention to. So if you look at the acceleration of e-commerce growth in eobuwie and the eobuwie group, so eobuwie, MODIVO and others, so this grew by some 61% from Q4 2019 to Q4 2020. So we have the highest growth in Southern Europe. So this growth and the result that we've seen in Southern Europe shows that Poland's sales of eobuwie, its share is roughly a little less than 1/3 as opposed to 40% a year ago. So this is a good measure of diversification. This is in line with our strategy. And another important piece of information is the growing profitability. For another quarter in a row, we've improved our gross margin. We have very good cost discipline. And so SG&A have been flat, so our EBITDA result is twice as high. So if we look at eobuwie, having in mind its importance for the group over the course of the whole year, eobuwie in 2020 generated PLN 2.2 billion in revenue. So this is one of the great winners of all these changes across Europe. It's grown by 52% year-on-year with a very high level of profitability. And what's very important, several things have manifested themselves as a result of these measures in 2020. Here, we would talk about the back end of starting in April 2020 of the warehouse. So the H2 store have K3 modules in the warehouse. We started to launch this at the end of the first half because there's some issues we had with the automation of that process. And so in the second half of the year, we have a fully efficient process. And so this will work for us for the full year of 2021. So we have rapidly growing MODIVO, which has also outpaced our expectations. So its share of revenue in the eobuwie is 10.7%, so it's higher than originally anticipated. If you -- let me start with a question about -- you might ask about a new investor in eobuwie. And I can say that the interest is proportional to the growth and the results of the company. So everything's going on schedule. So having in mind the calendar, we communicated to you. So in Q1, we'll make the final decision on the subject. So this process is moving forward in an undisturbed fashion. And so we can't really say anything else about that subject at this time. We can't add anything other than saying that everything's on schedule. So really visiting the overall group level and if we look at this, from the point of view of the margins, you can see that our gross margin in Q4 is down by 2.5 percentage points, and that's because of 3 major reasons. The first one is the higher sales pressure because of administrative lockdowns and trying to get ahead of these lockdowns and also the share of Black Friday in retail because Black Friday's share was relatively high. The next issue is the percentage held by e-commerce itself, so about 1.8% that you see here basically to lose a little bit the gross margin. The next thing is sales to [indiscernible] and so this also dilutes the margin. If we look at the overall operating results, we can sum up them in the following manner. Revenue is flat. It's good because of what happened in e-commerce. Gross margin, if you look at that, is down by 2.5 percent point -- 2.5 percentage points. But the gross margin improved quite a bit in the e-commerce side of things. Our SG&A costs are roughly flat, having in mind the operations of the stores. So if we look at the subsidies available in Q4, they were just available for a small number of markets where we operate. So this is negligible. And we have the cost of sale. So the cost of e-commerce, but the growth of these costs is lower than the growth of revenue. So cost of ground, to a lesser extent, than revenue. But you would remember that in Q4 of last year, we released provisions for the management program, management incentive program. We didn't launch that. And that was roughly PLN 30 million, which was debited to the cost last year. So the EBITDA result was around PLN 117 million, and this is for continued operations without [indiscernible]. So under IFRS 5, we will show you a small profit of a few million zlotys, but this has been in the presentation. If we look at the level of debt quarter-on-quarter, right under the lockdowns, we have things pretty much at the same level. So we launched limits, guaranteed lines of credit through BGK Bank. We're highly advantaged -- advanced if we talk about the new collection, SS21. So we have roughly 3 million more in our products in our warehouses, and it's available in our e-commerce sales. And we're already starting to sell this first -- this collection. This is in line with our plan. So during our next meeting, we'll talk about our stock levels. Inventory levels will be a little bit higher, primarily because of the deliveries of the Spring collection, which is something we consider to be a positive thing. So if I move on to the summary of what's happened in the company in 2020. So we're emerging from this crisis stronger. We've stabilized liquidity situation. We have revenue that's comparable year-on-year, which is not something that was so obvious. If you look at many of our peers, this is going to be something that's quite rare. We were able to adapt quite a thing -- a few things in our business and become a business leader here. so e-commerce sales represent 50% of our sales. We're more and more present in casual. So it's growing significance of this casual business. We can see greater price sensitivity amongst consumers. So this is something we'll continue to explore. Then we have strategic changes in the group, which are linked to the changes in the environment. So slowing down or reducing the development growth of space in the CCC network, concentration on digital channels and CEE, reducing our operations of B&M and Western Europe and utilizing the opportunities that appear for organic growth, which we see in terms of what I referenced in item 2. One of the opportunities, in addition to the acceleration of e-commerce, and this is something that we want to address, is this: our new off-price concept to respond to market changes. We see acceleration in the changes -- acceleration of changes in the environment. So they want value for money. So the retailers market on the seller side as well as the renter side are actually under pressure of the events. And so the prices are under pressure, and that's how the off-price concept can take advantage and the e-commerce can take advantage. We have a very good customer base, and we have highly advanced and sophisticated CRM system. We've got very strong relations with the landlords, strong relations with the brands. We've got a proven capacity to scale our business. We've got very good auxiliary processes that have gone through a profound transformation in previous years, and this is one of our advantages. We've got excellent competencies in terms of our online and omni-channel capabilities so we can test new things. And so what are the key takeaways for CCC in terms of this new concept that we want to test and that we want to open up in the Spring of 2021? So we have complementary categories based on our current base of customers. We've got good relations with our brands. We have a large number of stores that are relatively large. We want to convert them into a slightly different concept. We've put together a seasoned team. We're going to take our initial steps in a very cautious fashion. We want to test this concept. We're looking for the right target name under what brand we're going to operate. This is going to be an off-price concept, so well-known brands sold at good prices, attractive prices. So if this concept proves itself, we're going to be able to say more about it during the Investors' Day, which we think will take place somewhere between the second and the third quarters of this year. So coming on to the final summary. How would we like you to remember Q4? Basically, our collection had a grand reception in Q4. So up until the end of the 20th day of October, we had higher sales year-on-year online and off-line. We can see very good conversions in our e-commerce. Perhaps the level was low, the comparative level, but you can take a look at what was happening with our competitors. We have rapid growth of revenue in the e-commerce segment, some 84% and a very high profitability of EBITDA in eobuwie, so this is some 11%. Then we have a stable liquidity position, good preparations for the SS21 collection, reduction in net debt by PLN 150 million and then some 70% of the deliveries of the new collection have been completing -- have been completed. And the next thing that continues to distinguish us is our ability to react flexibly to a dynamically changing environment and utilizing the opportunities that are taking place, so as we address the strong and growing price sensitivity of consumers through our own off-price concepts. So this was what was happening in Q4. And then we'll have the extended month of January. We'll sum up this quarter, once again, at the beginning of February, and that's how we'll begin the new year of 2021. We are well prepared. We're thinking in terms of scenarios, regardless of what we think will actually transpire. And we're looking for those opportunities that the group can have. So I'd like to thank you for your attention. I would like to encourage you to post questions. And so as the management team, along with the Chairman of the Supervisory Board, we're at your disposal.

Okay. Let's go on to the first question. What's the cost of the debt service in the CCC Group? Today, we're not providing that data. The percentage of debt cost servicing is analogous to last year's, so the costs year-on-year will be lower. We don't have it in the presentation. That's something we'll present during the full-fledged presentation for Q4 and the full year. And so the cost of the debt is at the same level? With respect to the debt, we have with banks based on VBOR. So the cost of banking interest, it's roughly PLN 1.1 million, PLN 1.2 million per month and plus the cost of the bonds. When can we anticipate a short list of investors? I've already responded to that question. Perhaps Karol would?

We don't want to expand the message beyond what Marcin said. I hope you'll understand what we said. By providing additional details, we could thwart this process and it's something that we don't want to do. So we're not going to make any comments, making any additional comments on top of what you've already heard.

To an extent, if you think about your technical -- the technical capabilities you have, like esize.me on your phone, what sort of other sort of technical novelties or bells and whistles do you plan to roll out? And to what extent are they supporting you? So let me try to give you an example. The conversion amongst customers, we use a scan of esize.me. What the conversion amongst those type of conversions who use -- conversion amongst those types customers is 2 to 3x higher whether they're using the app or the website. So we can say that sales are successfully completed more frequently amongst those customers who utilize the esize.me functionality. Another thing, the visual search that we talked about, and so I can say the conversion amongst the people using the visual search functionality can be double digit. So we can see the effect, so the challenge is to scale that up. So it's easier to say than do. But this is something that we're going to work on. Then we have the ultra-rapid deliveries we're going to call the CCC Express. So during a meeting, people can order shoes, and the courier will deliver the shoes to their meeting spot. So this is something that's a very big advantage to customers and generates the wow effect. Now the topic is to scale that up. There's a large number of innovations. The idea is not to bore you with a long list of these innovations. But they're going to be more and more digitized. That's why timeless, all the stores we have. That will have self-service cash tellers and then we'll be able to work on an additional driver or engineer. What about the support you received from Polish Development Funds Shield? We talked about the liquidity of Shield. We suspended that project. And we're looking at how that Shield should look in 2021 to see if it's attractive for us and what sort of solutions it will involve. Today, we won't prefigure whether we're going to use it or not. Of course, we're taking a look at every solution. If you're looking at the 60 Shield, so the voice of our industry has been heard. So our classification number is included. So having in mind the size of the group and the losses we had, so PLN 100 million lost revenue. So the level, if I've calculated correctly, is roughly PLN 3.5 million in November, but perhaps it can be expanded. Different markets have different solutions. So if they're available to us, then we'll utilize them. Another question about eobuwie and in terms of what's happening with respect to the company. What is the interest amongst investors in the operations of eobuwie? What sort of prices or values are you expecting for that? I think, Karol and I have responded to questions in that category, in that bucket. We're not going to be able to say anything more. Well, pro rata to the results, we're running interesting meetings. So please be patient in terms of this process, but it is fully on schedule. Does the group see any risks because of the high number of brands? Are you thinking about new investments in e-commerce? Perhaps the Chairman? And if you talk about the -- since we have a large number of brands and we have a large number of e-commerce platforms, do you see any difficulties?

I think that's good that we offer a large number of brands. That's the direction that commerce is going in, and e-commerce, to have additional products. So the offering is 6x larger than you can have in a physical store. I think we should remember, ladies and gentlemen, that these signs are very consistent. So whether we talk about eobuwie or MODIVO or CCC, DeeZee is something a little bit different. And if you look at the sales platforms, so if we look at that matrix of customers in the market, this is something that we're able to cover. We see more positive elements as opposed to risks. If you think about the brands and the products' brands, they have always been here. The product team has been gaining specific identification. This is what the customer wants to have. We can see that based on the sales on the eobuwie platform. Of course, we have a high level of competition amongst the other brands on that platform. And this, we're happy with how the results are fleshed out. Perhaps I would add, on the technical side, we do have several different platforms, and we're consciously developing them and improving them. And some of them are much lighter and will be able to help us enter new markets like a light platform, which we will utilize when entering countries like Greece and Bulgaria and so quickness is important. So it's going to [ be ] an MBP approach as opposed to a platform that is all powerful. The most important thing is for us to see where the customer is making purchases. And we've done a lot of work over the last 2 years regardless of the platform. We've got a single database of customers for the group. And this is the essence of the matter. If we understand what the customer is doing, where he or she is making his or repurchases, then we're basically home. We're there. So we can use NP scores or others. It's much easier then for us to manage this.

What was the result on your other operating business in Q4 2020? So in the preliminary results, we gave you the preliminary results. We don't break that down, so we'll communicate this at the next conference -- about the prelims or we'll present it at the full year conference. What's the cost of the customer acquisition cost and the customer value? Or what's the value of the various channels for an e-commerce business? This is data that we're not publishing at present and we ask that you understand this. Other leading online players don't publish that. We're a company that's at stock exchange. But we're just like every other player in the environment where we have competitors, and this is one of the -- this is a calculation that we don't provide that response. What was the difference in terms of open and closed stores? So once your online stores are open permanently, what is the potential for the growth of e-commerce spend? You can see that in November, we had the highest growth rate of e-commerce, 150%. But November is also a month in which e-commerce grows to the greatest extents. It swings to the greatest extent. So we had a very high base, grew by 15% in December. So we believe that it's something that will continue to grow very fast. Having in mind also that we're adding new markets, new brands, new signs. So this is not growth on a like-for-like basis. So we won't find any [ fuel ] missing here. What are your plans for space in 2021? Do you want to -- in terms of the traditional channel? Do you continue -- do you want to continue growing the size of that? In CCC, we're sticking to the principle of choosing quality and we're using e-commerce elsewhere and we're having refined space. So if you look at other marketplaces and channels of sales, that's the kind of direction that we're following. If you look at eobuwie as opposed to CCC, we're not waiting for some major expansion to take place. I would rather think about reduction of some sales base and CCC. We've been talking about adaptation. And we don't see any problem with that We have a few stores, maybe a small number that doesn't really meet our standards, maybe a little too large in the lockdowns that we encountered. And as we've grown our e-commerce position, we've become aware of that and we're going to basically bring some more to that. They will no longer a burden on CCC. Have the rents in the Polish shopping malls been suspended automatically because of the new lockdowns? And what does that look like? Well, it's hard to talk about January. It's not the case that the stores are shut down, and then 2 days later, you have a decision. You have to have negotiations. You have to make arrangements and agreements. So let's be patient here. Of course, we're doing what we can to be treated well in shopping malls. These are individual talks. It's clear that we can't pay if we're not able to make any sales. Well, they can't be in our results yet. They've been closed since the 28th of December. Next question, please give us an update about the divestment of [ AVG ]? We talked about that during the presentation itself. We have an investor presentation. We're starting the talks. We would like for this process to be completed in the first half of the year. We're presenting this as a discontinued operation in our business. We have a clear goal to concentrate and focus on CEE and online digital sales. How has the net working capital changed quarter-on-quarter in December? What was the level of inventories in December? And what's the net debt EBITDA -- net debt to EBITDA? With respect to the covenant, this has not exceeded We'll provide information about the rest of the questions during subsequent meetings. We're communicating some preliminary information. I've mentioned already in terms of inventories, they're higher by roughly PLN 70 million because -- year-on-year, because of the Spring collection forming a major portion of that inventory level and we have the anticipated inventories have fallen that we'll retain after this season. It's going to be highly comparable to last year's, which is roughly 450,000, 500,000 pairs of shoes. So this is not a major value. What's the level of spring-summer purchases in 2021? I've already talked about that. We're very pleased with the level of contracting. We've completed that process a long time ago. So we've already started the sales of these -- this collection because it's already -- a large portion of it's been delivered. What's going to be the size or the number of stores where this off concept -- off-price concept will be rolled out? As we mentioned, everything is at a stage of preliminary projects. Once we know more, then we'll share the information with you. And perhaps 1 month or 2 down the road, we're going to be able to say more. We're still doing some of our research, [ implementation ] thinking about how it should look. So today, we can't really say anything more about that subject. We can communicate to you that we're going to be able to say more about this somewhere at the end of the first half of the year and second -- beginning of the second half of the year. I'd like to ask you to update the problem about that's falling to at the end of the year. What are your ideas for rolling over payment -- repayments? As you know, we're in the process of refinancing. At the end of the third quarter, we hired a financial adviser, KPMG. And the adviser has prepared some initial assumptions for this refinancing, which we're endeavoring to do with the banks. And we're also talking with the bondholders, and that's more or less what we can communicate to you on this topic. So anyways, going on schedule, what's your CapEx plans for 2021? We're in the process of preparing the budget for 2021. It's because 2020 hasn't formally finished. So PLN 70 million, PLN 80 million is maintenance or replacement CapEx. The rest of the budget for CapEx is going to be development of digital or e-commerce sales. And then we have what's happening in Polkowice to distribute products. So we have a variety of different investment areas. We have a question from the English language chat. So CCC is aiming to get higher quality with the higher prices. We are serving very interesting collections, but the prices are stable. Are we going to try to raise those prices? I think we're always trying to raise prices. The first prices, as you know, during the lockdown, we had a very aggressive sales off market. So to start selling, perhaps it's not something you can really readily see in the results. But once we have a full year of sales, you'll be able to see that. So on average, the margin should be increased by roughly 5%. But having in mind the situation we have, this is not really something that we can show you. And then we're happy with the margins. But in the future, it should be much better. What's important, we don't see any sort of negative take-up. We're much more keen on quality, a different form of communication, better marketing. We want to have stronger brands and so basically to sell here in the various marketplaces where we're present. And they really enable ourselves to reduce the number of CCC stores and to be more present even in the e-commerce. We have a large number of interesting observations about prices, promotions. We don't want to really talk about them right now because we don't want to betray what we're actually doing in the kitchen in our business. Perhaps a question about the new off-price concept. Is this something that should be considered to be a more of a discount network? I wouldn't try to tweak this slogan too much yet. We'll come back to you once we know what we're going to do specifically. It seems to me that we've responded to the vast majority of questions. As I've mentioned, many of the questions were posed multiple times. So I think that pretty much wraps everything up. In that case, if we've exhausted all of your questions, then I can tell you that our IR team is at your disposal and is able for responding to all of your questions. We'd like to thank you for your attention, and we'd like to wish you a lot of good health and successful 2021. And we're working in such a way to make sure that the year will be of a similar nature in ilk for the company and for investors. Thank you very much. Bye-bye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]