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

Good afternoon, ladies and gentlemen. We're here to present to you new strategy of the CCC Group up until the end of 2025. Over the last 1.5 years of the pandemic, the market has changed a lot, so the CCC Group has also gone through a major transformation, and that's why we've prepared a new strategy, in which we can utilize all of the opportunities that we have. So CCC has always been poised for rapid growth, and those are the type of goals that we have today. And that's why our strategy is called everything is fashion. So basically, the company -- the group is continuing to develop. We're adding new brands and services to online and off-line. That's why we have the omnichannel platform. We've changed our logo. We have white and black that dominate the branding. And this is actually something that determines the direction of our development. And so we're moving towards innovativeness, modernness, fashion, our strategies well throughout cogent plan, which I fully authorized, and that's why we decided to make an update or revision of our strategy. Fashion is playing a bigger and bigger role. And so the meaning and significance of trends in the environment is gaining traction. So channels of sales are evolving. We see online and off-price segments actually growing by leaps and brand, hence bounced. And so we're following to the new trends in purchasing, payments and deliveries. The environment is changing very rapidly. New trends are appearing. The pandemic has changed a lot. So who is the modern client -- clients and his needs have really that have changed. And clients are much more omnichannel. They expect experience depending on the channel service. They're buying online. They're paying digitally. They pay attention to purchasing experience and additional services they expect, personalized communication, rapid delivery, deferred payments, it's very conscious and involved committed person. So they look at the product through fashion prices, but also corporate social responsibility. The customer is changing very quickly and services whole market. So the fashion market and the footwear market has changed and is being rebuilt after the pandemic in 2025, the market will reach value of EUR 280 billion in the countries we're operating. This is a growth of 26% with respect to 2020. And so the major lever -- a driver of growth is going to be online. So e-commerce in the total market will be nearly 1/3. So the point is everything fashion, and we're going to be able to grow several times. And so our new strategy is a continuation of the previous strategy. What we're planning to do is to achieve our goals that we had put in place for GO.22. So I'd like to thank you very much. And I now go ahead and ask our CEO to join us.

So the starting point for everything fashion is our GO.22 strategy, the foundation for our operations over the last 2 years and an action plan combined with a wonderful team, have enabled us to strengthen our organization despite this period of enormous challenges. As a result of the lockdowns, 2020 was a very peculiar period and the achievement of our strategic goals was overall impeded. Even despite that 2021 has been a successful year, we wanted to achieve and overrun our top line target for '21 in GO.22. So as a result of the work we've done over the last 2 years, 2022 and then subsequent years will be further acceleration of the group. So this recap, we can be quite satisfied with the sales results in 2021, and we gaze with optimism into 2022. So what sort of actions will we take in order to achieve that? Basically, we have to find 8 pillars of our operations. So we have dozens of initiatives under this strategy, and we've actually achieved the bulk of them. And so we've -- let's take a look at the most important achievements in each one of these pillars. So which pillar should I start with? Of course, I'll begin with the customer. Because GO.22 is a journey that we started by walking step and step with the customer. So basically, we talk about the customer everywhere we are and with a large capital. So the preferences and the needs of the customers determine the directions for the development of our products, services and tools. And with this type of approach, we are implementing the most modern solutions in our sales channels. We attach a lot of information, a lot of importance to feedback from our customers. We're regularly polling customers, and we're changing. We're evolving. We've also done a lot in technology and data, which is a very big change. So you can see this outside after the -- on the outside because of the enormous number of awards that we received for the group. And so the technology and data have become the foundation of our activities. And this is what we've assumed is that 100% of our business stations of the group will be based on the basis of data. We're building and developing systems to aggregate them -- to aggregate them and to process them with lightning speed. So loyalty clubs are a flagship example. We have nearly 12 million customers in our CCC Group. So our focus on technology is accelerated development in another area, which is omnichannel. What does the ecosystem in the omnichannel trade look like in CCC Group? And so basically, over the last 2 years, we've increased our -- we've put a lot of focus on digital channels. So nearly 50% of the group's income comes from e-commerce, 10 percentage points more than our final goal for 2022. And this is because of the rapid of our e-commerce platforms. Compared to 2019, we have added some 45 unique digital points of interchange with our customers. So in less than 2 years, we've more than doubled the number of e-commerce platforms. So omnichannel is above all a way in which we can penetrate -- interpenetrate online and offline, and wipe out the differences between them having the natural flow, but from one channel to another, we're digitizing our stores. We're adding unique and fascinating technologies like scanners, RFID, tablets, Internet kiosks, express deliveries within 1.5 hours. And so we're combining stores with e-commerce world using hubs -- logistics hubs with our sources. To conclude this area, we're happy with the level of digitization in sales and the sophistication of our omnichannel approach, where has a revolutionary change taking place in the last 2 years. So we can say this is the product because the product is our greatest strength. We can multiply the examples, and we've mentioned them many times in our earnings calls, we focus on the strong brands we have in developing them. We've increased our team numbers by more than 6x, team numbers that are responsible for our product development and procurement in the group. We're gradually adding new brands. We're reaching new groups of customers. We're adding apparel and we're increasing the addressable market substantially. Our products have the best marketing back up. And we've talked about this during our earnings calls. So our innovative communication strategy of 360 degrees means that we're the most interesting company in the industry. Multiple times, we've emphasized in our conversations with you that we're proud of how we've redefined the product and the communication in the group. So CCC Group has gone through major changes as an organization that streamlines its processes. We've added tools, which make it possible to effectively manage the organization based on data. We've also rolled out OMS, so order management system, which we launched last week. We've integrated our store inventory stock along with warehouses. And so we're very pleased with the business effects. We've centralized selected functions, organizational functions and achieved synergies. We also have information about deliveries, and we have the portal for vendors and teammates which is basically transport management system. We've also increased our logistics capability several times in e-commerce in order to be able to scale up without any problems and adding fuel for online development. What sort of tasks have we achieved in financial scalability? Well, we have run effectively the process of refinancing. As a result of we've been able to achieve a long-term structure for group financing, we have added attracted new investors, very valuable investors for eobuwie, and we've also purchased a stakes in eobuwie from its owner on conditions that are -- and terms and conditions that are favorable to the CCC Group. Another area where happy with the achievements is in sustainable development. And the best metric here is that 2 years ago, we wanted to have an A rating upgrade under the MSCI ESG. We did this 2 years earlier than we had anticipated. We're amongst the leaders, and we actually intend to go further and higher. This is one of the few -- one of the many distinctions we've had received in the next few years. We're 11th globally and the third in the industry and when it comes to inclusion -- diversity and inclusion. And so we have LSE, which is actually rating several thousands of entities, we've also been treated as the -- awarded as the most sustainable company in the footwear industry according to the World Finance Magazine. And so we're the most sustainable company across world according to this World Finance Mechanism. And there are many, many other awards and distinctions that we've received, and we've advised you of those during our earnings conferences. And we've also talked about it through our effective channels of communication. So one of our flagship projects is a responsible product. And so basically, we want to do ecological development, and we're doing that through our collection, which is called Go for Nature. The most important thing is the last one, and this is part of the development of the CCC Group. What is that foundation? So we have people inspiring culture and joint shared values. So CCC is one of the most desirable employers capable of attracting the top talents. And we are focused on continuous development of competencies, both specialists as well as managerial competences. So we're working as a team, we're aiming higher, further and broader. We've created a winning culture. We've gone through the test of fire. Who are we today? Let me show you a short video to tell you to illustrate who we are. [Presentation]

As you've seen today, we will structured conglomerate with complementary brands, business lines, creating, informing a strong and ambitious group. These brands address different segments of the footwear and apparel market. For more than 20 years, the CCC Group has successfully been building its market position and its market recognition amongst customers. And so customers are at the very center of our strategy, so they are focal points. So we've summed up now who the CCE group is and how we've gotten to where we are. Let's take a look at where we want to be in 2025. [Presentation]

So our mission is for fashion to be available to everybody everywhere. And so we want to emphasize 3 things through this model. And above all, we're showing democracy. And our group, every customer can find something for him or herself. And the other thing is fashion, everybody can dress according to the most up-to-date trends. And the third thing is that we want to be available everywhere. So omnichannel approach, whenever and wherever you want. What is our vision then? So we want to be the biggest omnichannel fashion platform in Central and Eastern Europe. Above all, we're here about fashion, making fashion available through omnichannels. We're doing the best in the region, and we want to be even stronger. And so this journey hasn't come to an end. Basically, the journey is just getting started. What sort of values are we guided by? Our organizational culture is structured by values which are encompass in terms of trying to achieve our ambitious goals that we're talking about. We're a company that is driven by customers. Basically, it's not -- I mean we're really driven by meeting their expectations and basically, the inter things in our organization are released as a result of working with our customers, we're proud of the product. We're proud of the service we're able to deliver to our customers, and we're looking for good ideas, out-of-the-box ideas that develop the business. And we constantly look for areas where we're going to be able to improve our effectiveness and efficiency. And we want to do this in a responsible fashion, responsible with respect to the world, responsible with respect to our business, to our customers and responsible -- we want to be responsible for ourselves. And basically, responsibility means that we have respect. That means that's the basis for our cooperation. Basically we're placed for the best people to work. That means that every member of our team has place, has room and headroom to achieve his or her potential in terms of making it -- realizing our vision in order to provide fashion to everyone and everywhere. What is the basis for doing this? First of all, we want to triple the size of the business. And so the CCC Group story has always been about growing the business. It will continue to be growing the business. By the year 2025, we want to triple the size of our business. So if we look at the last 12 months of top line, hence, so we're developing the categories, and we want to grow even more. Hence we have 4 major growth drivers: CCC, HalfPrice, Modivo, and eobuwie. And so the strength, the momentum of the last 2 will become even bigger, and they will gain an importance. What will be the profitability of this business? It's going to be a high level of profitability. We assume that it's going to be at least 12% EBITDA margin. And of course, there's a lot of room for upside. This is a conservative assumption. That's certainly true. And so we want to strengthen our EBITDA margin. We want to scale up our e-commerce channels. And we want the HalfPrice comps to mature, which I mentioned was launched in May of this year. What will the product offering of the group look like in 2025? We'll have other categories growing other than eobuwie. So from more than 15% to more than 1/3 in 2025. And we have the apparel segment, which is 3x bigger than the eobuwie and then footwear. And as a result of this direction, we're going to be able to grow the potential of the growth, the upside potential in terms of the addressable market. We have a customer, we have a loyal customer which is buying from us footwear. And we're involved in cross-selling, and we want to have the full look sales and to add new categories for our customers. So we have experience in this area. So Modivo and HalfPrice are big formats on this market, and they are growing dynamically. So today, the CCC Group is everything fashion. So our offering has fashionable footwear, fashionable apparels -- apparel as well as accessories. So we can find everything here, everything that's fashionable and is related to fashion. And where will customers be buying our products? It will be above all the way through our online channels. So online sales will achieve at least 60% watermark in terms of our sales mix. The recent years have shown us that customers are more and more willing to buy online. We're coming back to normalcy in our stores and customers are still buying online. So that's why we're developing our mobile applications. We're going to have more store fronts in web. We continue to develop our online at least 60% will be -- of us will be a digital organizational platform in terms of omnichannel activities. How will we be striving to achieve customers above all we're going to be working on customer satisfaction? So our benchmark is going to be NPS. We want to improve that by 10 percentage points for each one of our brands -- for each one of our strategic brands. And you can see how important we've been able to grow NPS over the last 2 years, we want to go further. And so this is the most important indicator for every organization in terms of determining how client-centric given an organization is and by constantly improving the customer experience and our digital product, we're proud of what we've done. We want to continue improving it, and we're going to be able to improve and enhance that customer satisfaction with respect to each one of our brands. What will be guided by? As we achieve or pursue our targets, we're going to look at, of course, sustainable development practices. And we have goals like circularity, low emission, diversity and transparency. We're continuing to develop them, and we'll talk about that further during the later part of our presentation, we talk about sustainable development. So the metric of our success will be above our ability to improve our MSCI ESG rating to the level of A+. So we also want to have satisfaction from engagement, employee engagement surveys. And we're going to track that in terms we want to release, we want to inspire even more employee engagement. We want to have our best team in the world to be able to utilize its potential in achieving its full capability. And so let's take a look at these goals that we've talked about, what our goals are. So these are the KPIs for our strategy in GO.22 everything fashion. So it's well balanced, very well connected, interconnected. We have goals that will enable us to achieve our success. How are we going to be able to achieve that? I'm going to like to ask Karol Poltorak to join us on stage and tell us a little bit about how we're going to be able to achieve those KPIs.

Thank you very much, Marcin. We've told you about our goals. Now let me tell you little bit about how and what manner we plan to achieve those goals. And what will drive us into the future. So let's begin by saying a few words about our business model. Over the last 3 years, it has crystallized. It's a truly omnichannel platform. It's a very voluminous platform. It's easily scalable, and it's well structured. And the key to this business model is what we see in this slide. We want to satisfy customer needs in a way, in which customers will choose themselves when we talk to each other. It's not so much to sell but we want to help people to make to buy. And so if I come back to the model, it seems that it's complicated, but it's really straightforward. So the foundations of this model are all of the synergies and the joint resources, they know how that we have within the group. So its knowledge about customer preferences. So joint purchasing, logistics, tools, sharing knowledge and experience. This is also very important. And so the benefits of economies of scale. So these are some of the examples. Basically, these are the kind of things that fill in our foundations. Then we have the brand names, the retail formats that we have. So we have the full price segments, but we also have HalfPrice segments as well. Since we have a large number of these brand names, we're going to be able to achieve and reach various customer groups. As we move up, we can talk about the channels. And here, again, we're very strong in our stores as well as online in our own digital channels, but we also can be selectively in other marketplaces. Basically, what we want to do is strive to allow customers to buy where they want to buy. And then we have products. We started with footwear and accessories. Now we're in the phase of strong expansion into apparel. And then later, we have other lifestyle categories that will be added. It's easy for us to join or add additional categories or brands. So in the near future, we can be also a marketplace platform, which will make it easier and accelerate the ramping up of our offering. And at the very top of the pyramid is our customers. We want to serve customers exactly the way the customers want to be served. And so our model also creates a relatively unique weight for products to circulate through the variety of channels. And this is actually illustrated by the graph. I think this is a pretty unique but not easy to copy. And this is something that forms our competitive edge. This model enables us to select the own brands and also the brands -- global brands. And so if we look at the perspective of individual channels as well as the products that are placed here from the full price and basically, we can move from the full price to the HalfPrice. And that way, so products haven't been sold at full prices, those products can be put into HalfPrice channels. This is attractive to us as well as to the brands that cooperate with us. And that's a little bit about the model. Let me go ahead and tell you a little bit about the outlook for the various brands. So let's start with the CCC brand, which over the last 2 years has gone through a major change. It's become more fashionable. At the same time, offering wonderful prices. And at the same time, it's focused on stores and just growing its digitization. And so what sort of goals and aspirations do we have for CCC. Above all, we assume that the CCC branded business will represent roughly -- a little bit more than 1/4 of the top line of the over group. So it will no longer be having the dominant position in our top line is up until now. Directionally, our aspiration here simply is to -- can you strengthening our position as the omnichannel leader in footwear in this part of Europe. And if we look at the major growth drivers, which we have in front of us, one, those are A stores, where we'll see more and more manifestations of digitalization as well as optimization in terms of store count and the conditions on which we run those stores; B, is the development of CCC's own brands portfolio. I'll tell more about that in just a moment; and, C, continued expansion of digital sales based on ccc.eu as well as our mobile application. And so we will describe these levers using specific strategic indicators. First, we want to have PLN 10,000 of sales at the omnichannel level as an equivalent of 1 square meter of store space. Secondly, we want to push up our margins. We want to have margins in the range of 57% to 59% when we talk about gross margins. And the third thing we want to do is we want to develop quite substantially our product to give our customers a much greater selection, 3x bigger selection, thanks to the opportunities that online gives us. But at the same time, we want to make this offer available in our brick-and-mortar stores as a matter of utilizing the digital solutions, which we've already rolled out and which we will continue to roll out. Now let me say a few words about these solutions that we've implemented. Now you can see that basically, we're developing what we call an ecosystem, which is the world of CCC. And we invite customers to join us here. And we're able, in a fluid basis, to mix the physical and digital experience. And this is the basis for our omnichannel approach. And this is what we're betting on in the future. So the store is and continues to be the most important center focal point of this ecosystem, but it will be surrounded by a full plethora neighboring services based on digitization. So our CCC stores are very strongly digitalized. We have wonderful kiosks, which make it possible for you to order basically merchandise or a missing dimension. If it's not available in the store, then it can be delivered to your home or to your work the very next day. We got e-side scanners. We have digital screens. We also have CCC Express you can have a delivery within 90 minutes and so on and so forth. We have a lot of number -- we have a lot of good things here, but we're not stopping here. Over the next 2 years, we're going to be working on more powerful tools to support our cooperation with customers for our staff. And we'll have supporting elements to underpin our communication, including, for example, RFID. Basically, we can say a lot of things are going to be happening digitally. And this is something that we'll continually be happening. So in CCC, we want to combine the best of the off-line and online worlds and this is simply what customers expect today. Now let's move on to discuss the outlook set for eobuwie as the leader of online footwear in CCC. And let's give the floor right now to Damian Zaplata, who a few months ago joined the group, as the CEO of the eobuwie.

So thank you very much, Karol. It's very nice a great pleasure for me to meet with you and represent such a dynamic and interesting company like eobuwie. I believe that eobuwie is one of the most interesting e-commerce projects in the region. This is one that has a lot of growth potential over the next few years. My first experience with this brand was roughly 5 years ago when one evening, basically I bought some sneakers. And basically, they showed up in my house the name -- the next day around noon. And basically, this generates a wow effect for me as a customer. And so I can say that our team is basically in its day-to-day operations is by being client-centric and entrepreneurial. And today, I'm going to tell you how we want to win the hearts of customers and continue eliciting this wow effect. So let me begin with the eobuwie brand. So our goal is to be the leader in sales of online footwear in Central and Eastern Europe. And basically, over the next few years, up by 2025, we want for eobuwie to be 1/3 of the CCC Group business, and this is roughly PLN 7 billion of revenue. And how are we going to achieve this? Above all, we want to focus on accelerating growth on international markets. The next important aspect is we want to continue developing our offering by implementing vertical marketplace for brands and suppliers of footwear. We will also focus on developing a mobile channel, which is important for fashion, which would make it possible for us to loyalize our customers. One of our top priorities is also to enhance the level of international logistics to make sure that we can deliver our products on the next business day approach after purchase orders are placed. And we want to focus also on growing conversion where we want to do that through the most modern e-commerce platform in this part of the world. Actually, these activities and priorities involve the achievement of -- or pursuit of very specific goals. I'd like to talk to you about those goals. Above all, what we plan to do is for some 80% of our top line to be generated from outside of Poland. And so by focusing on local customer needs and the local aspects of our global offering and creating an international organization, I'm convinced that we're going to be able to create and accelerate our growth abroad. The next goal is to focus on the mobile application as our biggest sales channel. This will enable us above all to satisfy our users for them to purchase conveniently and frequently using our platform. And so if you want to be the leader of the online market in e-commerce, of course, you have to deliver products very quickly. And here, again, our priority is next-day delivery -- next business day delivery. So up to 40% of our deliveries we want to have on the next business day approach, and that's why we want to develop our logistics centers on other markets outside of Poland. In the future, in a few weeks, we'll open up our first hub in Bucharest, and this will enable us to strengthen our position on the Romanian market. At the same time, we're going to work on conversion, which, over the next few years, we'd like to increase that by -- wrap it up by 50%, and we're going to be able to achieve that through personalization as well as optimizing the purchase path. And we're building strong and modern team, a technological team, which will be capable of achieving this goal. Naturally achieving and maintaining the leadership position is possible, thanks to our unique, unrivaled and specialized business model. We're focused on customer needs who buy basically footwear online. There are very few companies of that sort in our region of the world. And this model has, in fact, 4 pillars. The first one is having the broadest and the attractive offering. And we want to double the size of footwear in our offering, and we want to have -- we want to offer global products as well as local products. And so this marketplace product will make it possible for us to achieve that in a cost-effective manner. So the second pillar are basically convenient deliveries and returns. I've already mentioned that, above all, we want for the bulk of our deliveries to be delivered on the next business day. And so our team is also working on innovative forms of deliveries like same-day delivery or fully digitalized process of returns. Of course, we will invest in our technological team in our platform, which is already highly specialized. And so it's dedicated to footwear, basically a search engine dedicated content product base, which nobody in this part of the world holds. And at the end of the day, an important competitive edge held by our company is our omnichannel approach. Right now, we have more than 20 points of sale in Poland, supporting our online sales and this makes it possible for us to offer a unique service like reserve and collect and also the ability to try on shoes without paying. And so we think this is something that will drive our customer satisfaction results. As you can see, we see a lot of opportunities for rapid growth. It's more than what we had imagined during the past. And that's why over the next couple of years, we want to invest additionally in these 4 areas. And in that manner, we'll be able to accelerate our growth and we'll be capable of building our market share. And of course, this will entail some investments and temporarily, we'll have a lower profitability over the last 2 -- the next 2 years. But as a result, we'll be able to strengthen our dynamic growth. And so one example illustrating our approach is the opening of new eobuwie store in Prague, Czech. And so basically, we can say has exceeded our expectations and has clearly contributed to strengthening our competitive advantage on the online market. And so we're capable of offering rapid deliveries in the city of Prague and also reserve and collect service. And so we have very good business results in the store, and it's become profitable very quickly. And this is the direction we want to follow as we develop in other capital cities around the region. And so this is an example of how we're able to effectively build our competitive edge as a result of having a specialized action model -- model of action. So our team over the last months has prepared a very specific operating plan for the upcoming couple of years and it's based on 15 core initiatives, which will enable us to achieve our objectives. So to recap, we're going to focus on having customers -- have the best customer experience, we want to increase the number of customers to 10 million, and we want to bump up our conversion rate to 50%. The next area of concentration is the offering and the price where we want to substantially increase the number of products. And what we want to do is for 80% of our product range to be in the best market price. So if we look at logistics in turn, we want to truncate or shorten the service time by 50% at the warehouse. So by automating things and we want to build new hubs and develop our logistics network. And that means we're going to be able to shorten the delivery time itself by 20% to 25%. And also post-sale experience is very important. And here, we're going to concentrate on lowering 3x the number of contacts with customers while maintaining a high NPS score in excess of 70%. And so basically, this is a well-tested model -- business model that we want to bolster even further. Now we can go on to brand in the group, which is Modivo. And so it's a young project which was set up in 2019. And from that time, it has grown very dynamically. Over the last 12 years, we've generated more than PLN 400 million in revenue. And over the next coming years, we believe that we're going to be able to maintain that pace of growth. So what is our aspiration here? Above all, in 2025, we want Modivo to generate some 15% to 20% of the group's topline, which translates into a business worth more than PLN 3 billion. So this success will be based on several pillars. So Modivo is, above all, is the broadest multi-category offering, which is addressed to fashion trends and lifestyle. We don't want to limit ourselves just to footwear and fashion, we also want to offer it to our customers ability to buy products in other areas like beauty, home decor and lifestyle. And so it's the #1 vertical lifestyle marketplace in this part of Europe. So today, many brands have limited capabilities of reaching customers online. We want to make that possible such that we'll be able to build these brands, their strength on the e-commerce marketplace in opposition to other players on the marketplace that have a multi-category approach. So this model proves itself and works quite well in lifestyle and fashion categories. Then next area is focusing on purchase experience by delivering innovative services like the same-day delivery or digital trying on rooms and localization -- loyalization and personalization of our platform amongst the customers who are buying from us. So let's take a look at some of the key performance indicators for this business. So this platform will have 2.5 million products, so SKUs. We'll have more than 3,000 brands and 15,000 suppliers or vendors. Our plans are for 1/3 of our top line would be delivered through a marketplace approach. What's important here is we would like for our top line per customer to grow 3x. We want to triple it. So the growth of Modivo to a large extent, will be based on expanding our offering. So let's take a look at this in greater detail. So today, Modivo offers roughly 150 stockkeeping units products. So it's 3x bigger than it was 1.5 years ago. In the meantime, we've built put together a strong category team, and we want -- we plan to roll out a marketplace in the first quarter of 2022. And this should make it possible for us to make our offering growth more dynamic to make sure that in 2025, we're going to be able to achieve offers worth. We want to have 2.5 million products by that time. And so above all, this growth will come from new categories. So they'll represent roughly 1/2 of our offering categories like beauty, home decor, lifestyle, what these will set Modivo apart, and they will basically deliver value to our customers. So the development of this offering will be accompanied by higher customer numbers. And again, here, we want to deepen the synergies between eobuwie and Modivo. So by 2025, we want to maximize the number of customers buying from Modivo as well as eobuwie. And so people who are buying shoes have also needs in other areas linked to fashion, and we're very effective in terms of converting users in eobuwie into Modivo. Today, more than 60% of our customers from Modivo are also eobuwie customers. Let's imagine that. So if we look at the potential we have, when we convert 60% of our customer base of 7.8 million customers, if we're able to convert that into Modivo, Modivo would have roughly 4 million customers. And so as a result of this, we're going to double the frequency of purchases. And so we want 2 plus 2 to equal 5. Let me go ahead and give the floor now to Adam, who will tell us a little bit about our newest project, which is HalfPrice.

Thanks, Damian. I'm very pleased that I'm going to be able to tell you a little bit about our youngest brand, which is HalfPrice. Let me tell you a little bit about the experience we've had from the moment in time when we launched our concept and about its further scale up. So maybe first, a little bit about our aspirations. So as aspiration, we want to be the leader of HalfPrice in Central and Eastern Europe. We want to have 15% to 20% of the top line of the entire group to come from this brand. So this would be roughly more than PLN 3 billion by 2025. How do we want to do this? We want to do this through development and expansion on the key markets, the markets the group considers to be key, by building and developing a strong online platform. And we want to, of course, utilize the competences the group has in the Full Price segment. And basically, this converts into the following strategic KPIs, if we look at expansion. So today, we have 38 stores. We see potential ultimately for roughly 250 stores with an average area of 1,500, 1,600 square meters. We're going to take a look -- analytical look at this. We'll verify, of course, performance on an ongoing basis. In the upcoming days, we're going to start with our e-commerce. And we want for e-commerce to represent ultimately at least 20% of HalfPrice's top line. If we look at profitability, we're looking at a 45% gross margin and EBITDA in the double figures. And so I propose that we go back to the beginnings of HalfPrice and sum up the plans and potential in a broader context, once again, the diagnosis that we had, which turned out to be very on point. The development of value for money segment and looking for occasions with respect to well-known and like brands, this is something that our customers like. And also, we have this market that hadn't been utilized, tapped into in Central and Eastern Europe. So what have we achieved up until now? Let's not forget we're still a young concept. And despite that, over the last 12 months, we've been able to build a very strong team. We've opened 38 stores in 4 countries and another 10 stores are in construction and will be opened by the end of the year. We're just a few days before starting our online sales. And this year, customers will be able to enjoy making the purchases on this platform. We see further upside to scale up, so let's go ahead and take a look at some of the lessons and conclusions we've drawn. First, we see that there's very good uptake amongst customers, both in Poland and abroad. Secondly, if we look at the structure, the HalfPrice because it has many categories, generates higher sales and a margin per square meter versus CCC. We can say the incremental growth is some 20% to 30%. On top of that, we're developing our brand offering along with accustoming -- making customers accustomed to this format. So these stores will go through a maturation process in order to improve their performance. So the entire time, we see how much we can improve in operations to become even more effective. And it's this type of effectiveness that we want to enhance through sophisticated data analytics and by developing our synergies with the CCC Club. So all of these aspects taken together give us quite a bit of comfort in terms of our ability to scale up. And so if we look at the fifth -- let's go and look at the brand in the group, this is DeeZee. I want to go ahead and give the floor to Karol to tell us about that fifth brand, which is DeeZee.

Thank you very much, Adam. So today, DeeZee is the smallest of our brands, but at the same time, it's a strong and important brand and the overall architecture of the group's own brands. So DeeZee, how do we see it in the near future, strategically speaking? Well, this should be a pan-European fashion brand that would be very strong in the social media, offering shoes, apparel, accessories and other categories that will be quick and agile. And so basically, we're looking at the women's segment, young and fashionable clients. So we're going to be in the e-commerce space on dozens of markets across Europe. We want to tap in full into the synergies from the group, selling directly to customers, but also through external marketplaces -- platforms, which will help us to build the recognition it has on new markets. If we look at the outlook up until '25, we would -- our plans are for DeeZee to represent nearly 5% of the top line of the group and contrary to the appearances, that's not so small of a figure. So the parameters -- business parameters, we'd like for DeeZee to achieve, while they're as follows: Above all, we want to increase the top line 10x from 2020 to 2025. Let me remind you that DeeZee has already grown 4x over the 3 years from the moment in time when it joined the CCC Group. Secondly, fashion should represent more than half of the sales. And sales outside of Poland in Europe should also concentrate a very clear majority of DeeZee's sales. And of course, we've come to the end of our discussion on the various brands. Let's go ahead and take a look once again at the outlook for the overall group. From the point of view of our customer segments. We are operating, and we will continue to operate as a group of intelligently connected complementary brands. They're complementary in terms of the offerings, so ranging from footwear to apparel and on into new categories, but it also be complementary in terms of prices. We want to basically cover all of the important price shelves on the market. But from a geographic point of view, the CEE region continues to be in place. This is quite obvious. This is our home market, and this is where we want to focus our attention. We also plan on a selective to go beyond the CEE market. Here again, we have eobuwie, Modivo and HalfPrice in selected European and Western European markets. And we also want to develop CCC in the CIS region. So basically in Russia and Ukraine. And so if we look at market shares. In the footwear category in our key 9 markets, we want to increase our market share from 16% to 22%. On top of that, and we've already talked about this quite a bit, we're entering the market, penetrating the apparel market, which is much bigger and our aspiration is to utilize our strongest brands, Modivo and HalfPrice, we want to contend for another 3% market share. What does this translate into in terms of total revenue, then we would have a realistic chance of actually tripling our business -- size of the business. Well, on one hand, it seems that this is quite a bit. But as we bring together the upside potential for the various brands. And we have in mind these brands will grow, online will grow. We'll have new categories coming online. So the triple growth is something we consider to be suitable and achievable. And now we have a unique opportunity to achieve that type of growth, because the market is rapidly transforming and we want to deliver this growth. So let's go ahead and look go through a discussion of the plans in the various areas, which will basically feed into our financial aspirations. So now we want to discuss selected foundations of our online channel platform. So first, the product. Here, we're pleased with the extensive improvement in this area -- in the last 2 years. We want to continue and drive towards improvement. We want to be faster. We want to propose clients more frequently, create opportunities, new things, what we call capsules during the season. We want to continue emphasizing ecological or environmentally friendly lines of products in our offering, but we also want to develop our collaboration with other brands. We want to collect and use hard data when we make decisions and when we make projections in terms of what we want to order and what sort of quantities we want to order. And what's also important is we're following a separate strategy for sports, which is particularly important because we want to generate some 30% of the growth of CCC under this brand and through this category. And so if we come from a pure product approach to the brand level, we have put together a very strong team in marketing. We've received some distinctions recently, and we're going to focus in this area on 6 key own brands, in which we've invested and continue to invest in 2021 and continue investing in those brands. And these brands will be a strong lever for our margin and an instrument for us to reach new client groups. A lot of things are going to be changing in the CCC marketing. We are thinking about excellent creativity, also 360 marketing. So wonderful cooperation between reach campaigns and performance campaigns. We want to track as many things as possible and place emphasis on the effectiveness of every single what do we spend in marketing. What's also important is that we want to be more relevant to young customers. And here, even today, a big role is being played by our digital channels, and we see many more younger customers, and we're elated with that. But not only through digital channels, while we're doing that. As you can see in this picture, for the first time in the history of CCC, we saw lines or cues into the stores, but not because of a promotion, but because of our store in the back-to-school campaign, it became a relevant place for young people, a place where you could live through some experience something valuable, something that goes beyond just doing shopping. Here, the second picture, just to give you some expectation, visualizes the activity of our brand, Sprandi during a concert this autumn, during which we had the opportunity to reach some 40,000 young people. Let me go ahead and dwell a little bit more on our brand portfolio. So if we look at our own brands, we've purchased a few strong and recognizable brands in Polish market like, Badure, Simple, Americanos. So we bought basically the brands and their customers. And so we see this as a complete brand portfolio that combines the full map, but it's also complementary. You don't really see any overlap of one brand over another brand because brand development involves prioritization. This is what we call intelligent management, smart management. So we have these 6 strategic brands Lasocki, Gino Rossi, Jenny Fairy, Sprandi, DeeZee and Badura. And so each one of these strategic brands has its own source of strength, clear identity, direction of communication and customer segment to which basically is like once they targeted, it's delivered. And so we're going to continue to consistently develop these brands. We're building from the ground up a team of brand managers. We're building them sales windows and social media profiles. And so we want to allow them to develop outside of the group. And so one example is branding where our customers can buy through new customers want to reach through. We want to reach Mayo customers who are looking for their sports shoes. And so if we look at other brands, external brands, third-party brands, we want to build broad as possible portfolio available to our customers on our platforms, especially in eobuwie and Modivo and HalfPrice. What's important here is that we're going to focus our attention on strong relations, multi-dimensional relations and cooperation with our key vendors under our 1P and 3P formula, Full Price, HalfPrice, helping them realize the brand goals of our partners. Here, we have a lot of experience. We've been operating with more than 1,000 brands, and we'd like to pump up that number of partners further. And our goal is to get to 3,000 brands being available on our platforms by 2025. And so now if we go on to brands -- from brands to customers and customer bases. Today, we have 23 million unique customers in our group space. And this is our biggest asset. And this is something -- this asset base is something -- this client base is something that we look at through various segments and through various cross sections. We've basically greatly developed our analytics. We've had a very strong data science team, and we have the right types of tools. And for illustration, we have -- we're recording more than 1 billion events per month, online and off-line. And this -- we're doing this to better understand our customers, as in the first half of this year, we have refreshed the CCC Club, which is we call the 2.0 Club, and we're working with a group of well-known frequently brand -- global brands that give benefits to our customers. So as a result, we've been able to drive up the average margin per clients in this various segment. And this is in excess of 80%. And so that's a lot. And so this is one of our fundamental KPIs in order to increase the number of customers in the silver and gold segments and convince customers to change their status because this will generate benefits for them, and we'll be able to make our relationships with CCC more profound. So in the future, we will continue to develop sophisticated analytics, more utilized a variety of models, predictive models, will utilize analysts to a greater extent in terms of how we build a customer lifetime value and how we manage it. And we think this is going to be a great leverage for our value in top line and the volume of our margin in a given segment or cluster or per customer. And so as I continue this idea of customer lifetime value. Well, this slide illustrates the classic lifetime -- life cycle of a customer. And so at every stage of life, we want to have the right goals, the right teams, the right tools and the right measures. So intelligent customer lifetime value management is possible, will be possible to a greater and greater, thanks to analytics, thanks to data. And we should also emphasize, thanks to great technology, which makes it possible, supports it and will enable it to develop further. And this is the best at that point in time to give the floor to Adam. So our Vice President responsible for technology and digitalization.

Thank you very much, Karol. So the CCC Group has been developing for many years. And we can see this in particular in terms of digitalization and digitization, not only in electronic channels, but also in stores, traditional brick-and-mortar stores you can see technology, the newest solutions like or the kiosks, the Internet kiosk. So I'm very pleased that I've been able to join this team because in the near future, we anticipate an even greater amount of acceleration, more and more investments over the next 4 years, that my colleagues have already talked about that. And so this requires quite a bit of investment and puts into the technology as a group. And so when we look at technology, and the foundations that we indeed have in place in order for the strategies developed at its own pace, we've basically put that into 5 business foundations. So customers above all. Customers have to be served omnichannel fashion, in a convenient fashion and in a way that they expect. Second, we want our stores to be modern and places venues where customers fell very served, employees feel that they have support from technology, and they have to be capable of providing services to customers in a professional way. The next thing is digitalization and intelligent utilization of data, a smart use of data. This is the fuel for the future. So customers should feel that we understand customers' needs that we're able to want to recommend the products that customers need. And at the same time, we should be able to tap into the modern technology in order to optimize that processes. We're talking about logistics, the supply chain. We're going to use artificial intelligence, which we've implemented to some extent over the last few years, but also robotization, which will also improve the supply chain. All of this has to be done through innovation. We have to be an organization that has a modern approach with respect to the future. And if we look in deep dive into the details, we look at the foundations for the operation of your company or organization of the future, basically, people with skills, technical skills, technology -- technological skills. Above all, people who are in the organization who are united with people in business, they're capable as partners to achieve and run the projects, the initiatives, implement them, sit down and create that future together. And all of this has to work under an agile methodology. And in its foundation, this should be predicated on the newest technology. Above all, this should be services, micro services, containers, which can be developed independently. But at the same time, interoperability is of crucial importance. And so in modern organizations, this is all situated in the cloud. And so the cloud is a standard where we have access to the newest technologies, but we also have a certain level of safety, which means that we'll be able to run the company safely, what is the best that it gives. It gives us flexibility, the ability to utilize different models, artificial intelligence to process data and fulfill the needs of our employees and customers. And so when we look at this agile model, what's important is when we talk about internal development, the applications we currently have in CCC, we will try to develop them to the greatest extent within the framework of our own resources. And all of this taken together should mean that the organization over the next 3 years will become much more digital. Above all, over the next 1.5 years, we want to hire some 200 people with technological competencies and skills to have even more internal development opportunities and to be able to apply the most agile methodology in terms of where the customer is. And this should enable us to accelerate the time of making changes and providing the functionalities that the business expects of us and the customers expect. And at the same time, it should make us much more efficient. And so we want to do all of this by 2023 in such a way that in subsequent years, this environment would be fully optimal and needed in order to deliver the strategy. So I've already mentioned a little bit about the supply chain. So I'd ask Igor to join us, and I think he's the best place person to talk about that subject. So I'll invite him to join us at this time.

Thanks Adam. So as Adam said, we want for the value chain to be managed and supported by new technology. One good example here is the order management system we set up as a pilot a few days ago. Basically, it gives us 100% availability of stock in the warehouse as well as in our stores. So having in mind the current logistic challenges, we have the container crisis, we have production downtime, we have rising transportation costs and limitations to resources. And that means packaging, so we have a strong value to supply chain gives us a competitive advantage. And so one example of CCC strengthen this area how well we've been prepared for the spring and summer season of '22. So what does our supply chain look like? Right now, we have a broad portfolio of suppliers with many years of relationship behind us. We have 2 hubs, well-organized hubs. So the third thing we have. As an example, we have the ability to fulfill online orders within 2 hours from the moment when they're placed in nearly 40 cities across Poland. And now let me tell you a little bit about our plans with respect to the year 2025. So our growth strategy up until 2025 is predicated on 3 major pillars. First, operational perfection, digital integration, third is cost effectiveness. And so we're focusing on customers in a holistic thinking about end-to-end. So from production all the way to the final customer. So under these pillars, what we will do, amongst other things, is develop our supplier base on leaps and bounds, we want to increase our capacity and the effectiveness of our hubs, logistics centers. And what does this mean? We want to open up an e-commerce center in Romania. We want to move a portion of our e-commerce operations to Central Poland. we want in that way to increase the percentage of deliveries directly to customers within a 24-hour period, and we'll expand into Eastern countries, Russia and the Baltic states, but potentially also some new Western customers. And that means that we might be opening up some new logistics centers. And with such expanded network, so implementing the system of products being visible in real time is an another initiative we have, which is RFID. And so tapping into the experience from other industries, we're going to start up a project, a program, which we call lean and agile. It's not just a program for the supply chain, but it's for our stores. And so it's a matter of standardization, shortening operation times and at the same time, will improve the quality. And at the same time, we're going to be able to speed up the flow of goods across supply chain. And this, in turn, will basically transfer or translate into reducing stock levels in the group. And so this is one of the more important elements of our strategy, which is part of the program to optimize our working capital. So when we talk about optimizing working capital, this is one of the important factors contributing to increasing our operating cash flow in upcoming years. So let me go ahead and give the floor right now to Kryspin, who will tell us a little bit more about the financial aspects of our strategy for 2025.

Thank you, Igor. So ladies and gentlemen, the key question here is how we're going to finance our new growth strategy? Well, we're going to do that through our own funds and by improving our credit worthiness, credit capability. So as we mentioned previously, we're coming out of the pandemic crisis even stronger. First, we see the outcomes of the work that we've done over the last 2 years. We've withdrawn, retracted from unprofitable projects, Switzerland, Austria and providing support to the Cycling Group. We've strengthened our presence in e-commerce and improved our gross margins, and this is converted into rebuilding our goal is to have at least 12% EBITDA in 2025. At the same time, we have a good start for HalfPrice, which at the level of the stores is already profitable. And so basically, the entire time, we've made a high level profitability in eobuwie against the sector. The second thing is we want to optimize our working capital. As Igor pointed out, we see a lot of potential to release some PLN 100 million as a result of shortening the turnover of inventory in CCC from 270 to 200 days. So the third thing that we want to do -- look at is CapEx. And so these factors will basically have an impact on the cash flow, which we plan to utilize to finance our CapEx related to rolling out HalfPrice format, the technology and logistics and e-commerce. And that represents altogether some 90% of the planned CapEx. So our spend in e-fund will be financed with the PLN 500 million that we've obtained from the SoftBank investment, and so forth, we want to utilize the improvement in our credit worthiness to finance the developmental needs through banking products, so reverse factoring guarantees or bonds. So we have in mind, green bonds as well as euro bonds. So now let's go ahead and take a look at another very important dimension of our strategy, which is sustainable development. So let me go ahead and give the floor at this time to Marcin to discuss that subject.

Thank you very much, Kryspin. So ladies and gentlemen, the sustainable development aspects are very important to us, and we take them into consideration in all of the activities that the group follows. So in terms of our ESG strategy, the foundations are products where we have sustainable collections, and we're making sure that we have the circularity. In terms of environment, we have ambitious plans to reduce emissions in all 3 scopes. In terms of employees that the heart of our organization, we are carrying about safety and their satisfaction in terms of the society. This is above all, but through the vendors code of ethics. And what are the detailed goals that we're putting in we intend to achieve in terms of ESG by 2025. Each one of the product categories in the group will have a sustainable collection. Our customers will have and receive precisely about the composition and methods of production by at least 40% will reduce our emissions in Scope 1 and 2 and by 10% in Scope 3. We will continue to work on equality and diversity in the workplace. Even though, as you heard previously, we have a high ranking in this area and where you will demand that all of our suppliers abide by our code of conduct, even though business strategy expands the period up until 2025. With respect to ESG, we've gone one step further. And this is because of our understanding of the expectations of stakeholders, but also bigger and bigger groups of investors. So what sort of goals do we half for ourselves by 2030? Well, basically, these goals are linked to the goals we have in 2025, but they go further. So in 2030, 50% of the group's top line will come from sustainable products. So our emissions in Scope 1 and 2 will be reduced by 80%. And in Scope 3, they'll be reduced by 40%. We will totally eliminate inequality in terms of pay. Let's go ahead and take a look at the last element of the omnichannel platform that CCC Group has, which is culture and people. And so let me tell you a little bit about our values, which form the basis, and we're going to achieve success through 2 strategic pillars. We have a unique organizational culture, and we have the best and most involved team. We want to create a strong and coherent brand as an employer, developing the group as a place of work where we can release the flow the energy, commitment and positive emotions that our people have. We want to create a place of work for the best people. And that's why we have talent programs and also to develop the key organizational competencies, leadership and managerial competencies. We will continue to build strong succession plans on the key positions and also having management by objective goals. And so basically, our strategic goals are to have a 10% uptick in the indicator in terms of engagement, 3x higher in terms of fashion tech in our key competencies, and we want to bump up our NPS score by 10 percentage points. So I'd like to thank you very much for your attention. I'll give the floor now to the Supervisory Board Chairman, who will sum up the assumptions of our new strategy and its objective.

Thank you very much to our CEO. So we've shown our omnichannel platform the brands that are part of it, as well as the foundations for our further growth. What sort of priorities will we be guided by in terms of executing our strategy. We want to continually focus on customers and their needs, developing the omnichannel platform for brands. And at the same time, we want to create quality, fashionable and affordable products. At the same time, our decisions and activities will be based on data. And so our culture will attract and develop the best talents. We want to follow the ESG criteria in the whole group, and we'll have sophisticated technologies made available to our customers in the organization. This is how, in fact, we want to achieve our strategic targets. So the top line of our entire group will be tripled. The EBITDA will be above 12%. At least 1/3 of our top line will come from categories other than footwear. More than 60% of our top line will come from the online channel. We'll continue to work on improving customer satisfaction. So our NPS will be bumped up by at least 10 percentage points for our brands. And we want to be the best in ESG. And so this is something that all fits into our everything fashion strategy. These are our goals to be achieved by 2025. So the CCC Group is today a totally different organization. It's modern, it's technological, is a fashionable product. We have a strong management team, effective managers and we've attracted new talent to the organization. And this is how we've been able to put in place the most ambitious goals, and we know how to achieve them. So I'd like to thank you very much for your attention. And now I'd invite you to join for the Q&A session.

So welcome. We're going to go ahead and kick off the Q&A session, and we have the Supervisory Board Chairman, Dariusz Milek like responding to questions; the CEO, Marcin Czyczerski. And we also have the Vice President, Karol Poltorak; and the CEO of the eobuwie Group, Damian Zapata. So let's go ahead and look at the first question. And you've posted a lot of questions. We have more than 50 questions. And the first question is, on one hand, you plan to add 300,000 square meters of space. This is an increase of 44% versus 2021. On the other hand, you anticipate that e-commerces' share will grow to 60% of your top line by 2025. Are these goals not overambitious?

It's a closed question. Let me say, no. We've actually done a really strong analysis. The growth space comes from the new HalfPrice format in 2 markets, Romania and Russia. E-commerce is Modivo, eobuwie and CCC. So these are different growth potential areas.

Okay. Let's go to the next question. Will you not have to have unrealistically high market share if your revenue would actually triple?

Once again, quite to the contrary, based on Poland, we can see how much of a market share we can gain across Central and Eastern Europe. So the key thing is we have 20% of market share in footwear in 2025. So we're starting from 16%. So we believe that the growth is not too big, there's headroom for us to grow. And if we look at the addressable market, which is a new market, so we're thinking about the apparel market. And this is where we say we're going to gain a significant position. We're talking about several percentage points in terms of market share. So we feel comfortable with these goals.

In terms of your strategy, how do you see the role of new investors in eobuwie? We learn about the synergies and the particulars of their participation?

Well, this is a new investment. This is an investment that will make it possible to finance our dynamic growth and the capital that's been injected will enable us to fund investments we plan over the next few years. And this is access to new technology, new trends from across the world and this will strengthen our shareholder base.

When do you plan the IPO of eobuwie?

The market environment is not conducive, perhaps I'll respond. The IPO will take place when the company is ready and the entire eobuwie team is working. We uphold the slot somewhere between 2022 and 2023. Of course, we look at the market. This is not the most important thing in terms of what's happening on the stock exchange with companies comparable to eobuwie, but we can say that there's a large -- a small number of companies that have such strong growth, top line growth, coupled with profitability. So we feel pretty comfortable in terms of eobuwie would be treated by the stock market.

One of the questions, you've said investments in eobuwie. Do you know what sort of investment -- what form this investment would take?

So of course. So the most sensible thing is for the CEO to inject money into the company. And we made the decision that this is the direction we would go. I can add. As I mentioned previously, I believe this is one of the projects that has the biggest growth potential in the e-commerce sector in our region. That's why I want to make -- that's when I investment here.

So let's stick with eobuwie. Your plans to develop logistics, which would bring you closer to the Zalando where the costs to revenue are much higher than what you have at present. Does that mean you're going to have more pressure on your margins?

I think what's the most important is we're not investment in logistics in order to raise the cost we're investing in order to increase conversion and convince our customers and loyalize our customers. So this is a profitable investment. Above all, this is how we should think about it. But if we look at the development of -- in our plans and perhaps the increase in costs will be of 1% or 2%. But these logistics centers are being set up in Central and Eastern Europe where costs are lower. Let me draw your attention to the fact that our development -- our growth model is different from what Zalando offers, which is based on own logistics, our model is more of a hybrid model where we'll have our own and outsourced elements.

The next question has been posed in English. I'll try to read it in Polish. Is the production process is something that you've automated? Are you close to having mass customization? Or do you intend to have on demand products and made to measure products?

Let me respond starting from the end of the question. Our fantastic scope of scanning service and being able to select the inside of the shoe and the 3D approach, this is something that's unique and unrivaled and this is something that can be done on a mass basis. And this is a huge advantage held by CCC. We're very proud of that. If we look at the level of automation of production, it varies depending on the product category. And if we look at synthetic shoes, it's much more automated. But if we look at leather shoes, it's to a much lesser extent. And so in terms of automation, it's not that advanced but certainly is highly advanced in terms of logistics. If I could add, mass customization in terms of the inserts into shoes, that's a project that we're going to implement next year and roll out. And so for individual customers, we're going to be able to build fit-for-size shoes in terms of the inserts.

Now we have several questions. Basically, we can merge them into 1 question. There's a lot of interest, whether or not you anticipate in the near future that the payment of a dividend or a buyback, which is more and more popular of late.

We can say -- as you can see, the company wants to triple business size. There are very few growth companies of this sort. And so every company is thinking about investing in investments. So buyback, no. So in the medium term, perhaps the dividend, it depends on the return to the profitability that we have on our path that we showed you. So in the medium-term PS, but now we're development and growth.

Do you see any threats in the form of the rising interest rates? With respect to upcoming quarters, does higher inflation give you the ability to transfer higher prices to customers perhaps to a greater extent than necessary? So paradoxically, is this a positive situation for CCC?

Let me say, we actively manage our pricing and promotions policy. We talk about that at our earnings conferences, and we see a lot of potential to build margins. As you can see in terms of our results, the margin is climbing. And so with respect to inflation, yes. And if we look at costs and the inflation on that side, in our models, we've incorporated that and this has been put forward in the presentation that you've seen. So the results and the ambitions we have already incorporate the price trends that we see today. Again, we feel comfortable because of the highly active promotion and pricing policy we pursue.

In terms of -- if you look at Ukraine and Russia and the escalation of that conflict, how would that affect CCC's position? To what extent could that translate into an impact on the strategic goals of the company?

In terms of Ukraine and Russia, our exposure to this region today, unfortunately, it's not big. We certainly want to increase that exposure. So if the situation is stable, then increasing our market share to those 2 markets will take place more quickly. If it's going to be less stable than the opposite will take -- will be the case. So it will be slower. So here, we assume that this scenario would be rather positive.

What opportunity -- what's the opportunity to improve cost discipline in upcoming quarters and years? So you can respond to this question that the customer will have cost discipline of there has cost of discipline?

You have to look at the structure of cost we have today, we can say that variable costs are growing, but that's because our revenue is growing even faster. So also in e-commerce. So we're ahead of the marketplace. And so costs are growing slower than top line. But the cost base is an area -- well, like can HalfPrice and Modivo, especially HalfPrice. And so HalfPrice is a wonderful example here in Banco. We have the dispatching center for e-commerce. We have the logistics. We have several hundred people hired in logistics. And so today, on to the test, setup of e-commerce for, they've sent out 30 packages. So we have revenue for sending out 30 million parcels with 100 people. So this shows you the relationship between revenue and costs. And so here, in terms of these brands, we're comfortable that we're going to have that type of cost discipline in place for the newer brands.

So if you look at the weakness of the Polish Zloty and other currencies in the region with respect to the USD -- U.S. dollar in terms of your strategy, your growth strategy?

So dollar is more problematic than the euro -- in euro with a natural hedge in terms of the revenue and expenditures in terms of the U.S. dollar, we have an active hedging policy. So some of the streams are hedged with forward contracts. If we look at the rest, well, it does have an impact on us. But as I said, we have cost inflation, what we feel comfortable because we're very active in terms of our pricing and promotion policy. Our margins are rising. We're speaking responsibly. There's quite a bit of possibility of headroom for us to work on those margins.

Now we have a question about one of your most recent recruitment announcements, and this has generated a lot of interest. You're looking for an employee on the meta versus some crytop currencies and FTE, what sort of hope does the group have for these type of technologies?

So you can see that we're highly innovative. In terms of the metaverse and the technology referred to in the question, we don't want to be the people who are just observing. We want to be a retailer who's actively participating in these things. We want to be one of the first movers to play a role here. And that's why we're building a team consisting of people who want to be involved in these type of projects. So at the beginning of the year, I think we're going to be shown to our customers much more in terms of the digital changes of our product through the mobile application. And so the digital world is part of CCC's world, and so certainly what's happening here digitally. And so we want to have that here in our ecosystem. We want to be to offer that to our customers. This is something that people need, especially young customers, and we want to attract them quite actively into our world. So it's very important to us. And you can see it based on our strategic. Our fashion tech will be 3x -- teams going to be 3x bigger. And as Karol said, we don't want to just be observers. We want to create this world. We want to drive its growth.

The next question is about eobuwie. Please give a comment about your future growth plans in terms of the marketplace in the group?

This is an important project, a strategic project. I think it will enable us to achieve our ambitious group. So in Q1 of next year, we plan to kick it off, and we'll begin with Modivo. And this is a platform, we're thanks to the marketplace, we want to build our position in new categories like in beauty, also in home decor. Today, we see a lot of interest of merchants. More than 100 purchases want to join us. And so I'm quite optimistic that we're going to have quite a bit of success. Another very important thing for eobuwie on the globe brands of our key brands are asking when we began the marketplace for eobuwie. Because the long-tail offering is an area where the marketplace can actually support and underpin the reach of our customers. And so we're thinking about this project with respect to eobuwie. And this would be a very strong addition. So to have the long tail for global brands as well as local brands, some of our plans are for our marketplace to function not only in a single country, but for it to span other countries where we have a footprint. And we hope this will take place very quickly, and we firmly believe that we'll be able to have a cross-border sales impact.

Now I have a question about the current epidemiological situation in the country. So if another lockdown is implemented in Poland, could this affect CCC's business results in operation? If so, how?

So if another lockdown would be phased in, would be another failure in managing the pandemic. I hope it's not going to happen. But of course, as a company, we have to responsibly prepare for such a scenario event, and we feel that we're well prepared. You can see that in every crisis, we talked about this loudly that we've come out of every crisis and strengthened. We have our scenarios for various events. What's very important to us as a leader in omnichannel business. Last week, we set up a new functionality. Today, we're able to switch with a single press of a button on all of our stores and put them into our e-commerce world and treat them as logistics hubs. And so this is already producing great results for us, excellent results. We're very pleased, and this is a very strong and important link for us. We talked about the HalfPrice format. We have more and more strengths. So e-commerce. So that's 55% of sales in November.

So the question is, what sort of digital companies able to handle that kind of situation? So if we look at the upcoming period, the CCC planning any additional acquisitions?

Perhaps I'll respond. We're focusing on organic growth. The strategy doesn't incorporate any new acquisitions. We're not planning anything specifically. We're thinking about the complementary and the customer journeys -- the customer CCC express and investments in express delivery. If there are any technological companies that show up on the horizon that could actually push our forward business -- put our business forward strategically, then we would think about that, but nothing major in terms of -- we're not intending in the near future to buy or acquire or merge with anybody.

You've mentioned and talked about the development of e-commerce in CCC. What are your further plans for further logistics development, especially when you mentioned opening a logistics hub?

So the company is growing very swiftly, and that's why our logistics have to follow suit. And so in December, we'll have a pilot of sending out parcels from our logistics hub. So we'll be able to shorten delivery times into the bulk, hence. And so this is an operational project, and we assume that, as of next year, it will serve those markets 100%. Then we have a specialized center which is a distribution hub for eobuwie. And we need some additional capabilities there to serve the business that's growing so strongly. Work is underway on the strategic development of our hub abroad and we'll be able to share those results with you in the future.

Let me add. When we talk about logistics and new centers. We're talking about synergies, reaching customers more quickly. We want to reach customers as quickly as possible for customers to receive those products as quickly as possible. So we have basically shared logistics centers for DeeZee, Modivo, HalfPrice and CCC. So this is something that will be very noticeable. We're not investing in customers and clients -- in countries where work is much more expensive, and we're automating these warehouses. So people who are joining us in logistics, these are people who are highly capable in terms of structuring those areas.

What percentage of sales of your products comes from Poland? What are your forecasts in looking forward?

Again, you have to look at us as 5 different brands and you have to look each brand little differently. It's different for Modivo, it's different for DeeZee, it's different for HalfPrice. Today, we can say a stake in the mix. Poland is the biggest market for eobuwie, more than 30%. We're very strong in Central and Eastern Europe. And now individual brands have their strengths in this area. So during the earnings conference, we talked about where eobuwie is strong, where Modivo, DeeZee and HalfPrice are strong. If we look at the strategy perspective, most of the growth will be outside of Poland, although, we do see a lot of consolidation potential in Poland. So as a big player, we become even bigger. But it's going to be more and more difficult for the other big players.

Let me add if we look at footwear, we're an exceptional player, not only in Europe, but probably across the world, nobody has more than 30% of the market in footwear sales in any market in the world. And so our strategy has quite a few reserves, and the major reserve is the sales of our own products, brands that have been changed in selling them elsewhere. So B2B selling them through marketplaces. So I'm convinced we can sell our products in the Western portion of Europe with a lot of success. So our brands in Greece and Italy are a great example. And in some cases, for several weeks, we were the top-selling brand, and we were tracking 600 strong brands. So if you look at the price to value relationship, we've generated quite a bit of sales and we attract substantial margins. And if you look at the Modivo development, we can anticipate that it can replicate the success of eobuwie.

What are the plans for this brand in terms of its strategy?

Well, I would say it has at least the same potential, if not more potential than eobuwie. Modivo is operating on a bigger market. That market is 5x larger. And that's why we anticipate that in the midterm perspective, this is going to be bigger than the eobuwie business. So the growth is highly dynamic, and we want to achieve it following -- by having the best offering, concentrating -- have been customer-centric, a wonderful platform that converts well with very strong logistics and marketing. This is what we wanted to, and I'm convinced that in this part of Europe, there is a lot and a lot of headroom for this type of concept for Modivo to be developed in growth. It's already a success because the growth we've achieved in recent weeks is above our expectations. This is in terms of building the broader offering we have. We don't want to replicate the success of eobuwie because it's not replicable because it's the sole platform. In this part of Europe where we are a specialist in footwear sales, we want to compete with the best in apparel sales and other accessory sales across Europe and in fact, across the globe. So basically, we're going to be competing with slightly different people. We have a new driver. We have unlimited capabilities, new categories where we can continue to expand them. And based on what we've done in eobuwie, we're convinced that we're going to be successful here in terms of selling other products. If you look take a look at this quarters that we started. So the figures really underpin this. So as scale grows, it's really the case that the growth rate continues to increase. We're talking about growth rates of 80%, 90%, 115%. If we would look at the growth, we would have even greater speed of growth or pace of growth if we were to end the quarter today.

And we have a question about HalfPrice. Will HalfPrice be in e-commerce? Since you have such a strong e-commerce background, why weren't you able to put in place the HalfPrice e-commerce format before middle of November?

Well, HalfPrice is a new idea for business. It's good we have HalfPrice in the group, which on top of Modivo, will give us a lot of growth in percentage terms. And of course, it's better to get started with a good e-commerce as opposed to poorly developed e-commerce. We're following our plans. So we wanted to begin with digital sales. You had to add marketing to that. You have to build scale. All of this is happening and it's going online with our plans. We mentioned that this would probably be done in November. November is not over yet. The question is, will we be in place prior to the peaks in December? For us, quality is more important than the pace. But work is going well. But we're not trying to -- we're not trying to rush this. We want to do it well. This is a fresh brand. We continue to build a new category which we haven't had in the HalfPrice stores yet. And once we're ready with that, then we're going to be able to broaden our focus, our scope. We're starting in Poland, and then we'll add new markets. Everything has its own time.

I would add -- it's not the most important whether we stop in November, December. We're following our plan. What's the most important is the upside we have for HalfPrice because this is a European format. So HalfPrice is something that we can penetrate the entire European market. There's a lot of potential here and this is something we've talked to you about.

Now we have a question about sales area, but from a different perspective. On to your strategy, do you intend to optimize the sales area of your brick-and-mortar network?

So under the framework of this development of the situation today, we're not certain whether or not retail sales will be limited or not. We see that it has a second life rejuvenation after these lockdowns. And if you think about omnichannel operations where you have stores versus e-commerce, it's not 1 plus 1 equals 2, but we think it's going to be 2.5. And this is one of the advantages that we have because nobody is strong in retail, has built such a strong e-commerce position, and nobody has strong in e-commerce has built such a strong brick-and-mortar network. I think we're an example of an entity that you combine the best of these 2 worlds. And this is where we want to exploit our competitive advantage. We're going to see how thing directions will go. Lease rates are very low, inexpensive and thinking about OMS and having stores function as warehouses. And so it's possible for all our stores to be profitable. Hence, so in the first quarter of next year, all of our stores across the entire network would be profitable. As you recall, we don't have stores in Switzerland, Austria, Germany. So that history is something we've put behind us.

Okay. What does your sales look like in November. The whole month is almost behind us?

So I've mentioned a few things like with Modivo. So our sales in stores is better than in 2019 at a -- on a square meter basis. So sales instance, we have lower discounts. So we have much higher margins. And e-commerce, it lives according to its own life, and it continues to grow strongly. Tens and tens of percentage points and the biggest areas. And so even though we have a very high base from 2020, Modivo is writing its own history, its own story, and it's continuing to speed up. We have another month in which the group is more digital than it is brick-and-mortar. And so there are several positive signs. But we have to remember that the quarter consists of 3 months, and then we'll have another month in front of us. And let me add margin. that the traffic is lower than in 2019, but the revenue is up. And so this shows that our collections have great -- have been received. We have 2 countries, Bulgaria and Romania, where we have lower results, but this is not a big area of our business because of the pandemic really. So Romania is a very important market to us, and we're going to continue to develop there.

And the next question is in the English chat. Do you plan to have a incentive program based on the KPIs and the GO.25 programs, so PLN 20 billion of sales and 12% EBITDA. Will the incentive program be based on those goals, KPIs from the GO.25 program?

To be brief and succinct, yes. The goals we have in the strategy, well, we're cascading them downward in a methodical fashion throughout the organization. And so the goals we've presented to you today are anchored at every level of the organization, where we should put those anchors and the incentive system we have will replicate that from top down, all the way down to the line employees. So everything is we call it basically an orchestra. The orchestra has the same goals.

And so the next question from the English language that having such a large number of segments in your portfolio, is that problematic for you? Does it imply for example, the necessary to incur additional marketing costs for Modivo and for eobuwie?

That's not at all the case. In label enables us reach different customer groups. So basically, these are complementary business models. Of course, we're able to catch some synergies in the back office and the platform the method in which we purchase media. So we're able to catch those synergies, those synergies. And we follow the same rules that you have in e-commerce that our marketing spend has to be profitable. So we invest more because we have 2 brands. That's not investing as much as we can to make sure that the investment in our customer pays back, having in mind the customer acquisition. Now this is the fundamental role that we follow. Customer acquisition costs have to generate a positive return. And so we have basically a good model in eobuwie of reaching customers -- footwear customers, and this is a big portion of the market where customers want to buy shoes on an online platform. And you have Modivo, which is a much broader, more voluminous platform but it reaches a different group of customers.

Let me add to what the CEO said. We also achieved synergies to a much greater extent. In terms of logistics, procurement of products. So in eobuwie and in Modivo, we have the same brands, but we're a specialist and expert in footwear because this is generated success for us. But of course, it's called differently in each country in terms of the logistics of packaging, but I think we've mastered that now. But the synergies, we have with our vendors are coming down to HalfPrice. We have similar brands. But as you know, the final elements entrance of products. So we look at this from the logistics purchasing media and joint transport, joint vendors and joint negotiations of prices with our vendors. So let's stick to eobuwie and you assume that you'll have a temporary decline of profitability over the next 2 years. To what level will you fall, let's say, in terms of EBITDA? And the pickup of the pace that we talked about in top line. And so it's an investment into logistics and development of our international presence, and we anticipate that the EBITDA level over the next 2 years would be somewhere between 7% and 10% and this is something that profitable undertaking. And we'll see that in terms of the results produced in subsequent years and achieving that scale of business would enable us to win the entire region. And this is our strategic priority. At the same time, an important investment is technology, where we want to continue growing, and we want to have that advantage coming from economies of sale. And at this level of profitability, this is something that's unique and attractive business compared to other market benchmarks in terms of fashion.

What are the sources of the expected improvement in inventory turnover?

So the guidance, what we're giving we're talking about reaching 200 days of inventory turnover. We believe is a conservative approach, and our ambitions are bigger. And we've talked about that for a longer period of time. What's the most important, we've got great teams and tools that we have in place, so we're finishing up in terms of doing forecasting, planning, inventory planning, purchases. And we have effects coming into onboard in '22 in terms of better rotation, turnover figures, selecting product offering, the method of allocation and transfers. And so our OMS system will be of great importance, and we strengthened the supply chain management responsible for supply chain. And we want to be able to have shipments coming into Poland or into Europe from Asia. And we'll have much smaller inventories. And so this will improve for turnover, inventory turnover. So we've written that down into individual notes. We've worked on this project for quite a while, and this is how we're operating.

Can you share with us some information about breaking out the EBITDA for 2025 into the various segments?

I thought we showed you that during the presentation on the various slides, if we talked about eobuwie is going to be somewhere between 7% and 10% in 2020 to 8% to 10% in the long term. But let me add, we have the residual income in 2025, which is going to be much bigger than we had anticipated. HalfPrice is all the numbers that I've mentioned are under IFRS 16 and then were to about 15%, 18% in CCC over the 2025 outlook. And what I've emphasized, we're saying that this is a conservative assumption. We would like for this to be even higher number. But we're guiding at 12% as the blended EBITDA. And let's stick to the EBITDA profitability.

There was a question about one of the slides that was presented during the presentation in terms of the financial pillar. The improvement to EBITDA that we presented on that slide is the budget replication of your assumptions for '22 and '23? And the question talks about a profitability of around 10%.

I guess this was read from the graph. I'm not sure which slide? 53 is. But today, we're not -- I think you could look at it in the following way. In 2022, 2023, we should strongly improve the profitability in CCC, this should be a year with -- or years without a lockdown. So all of outcomes, the results of the labor that we've done, we can see it now, but we'll see it without the impediment driven by the COVID-19. So then we have growing scale to Modivo. I've already talked about this a few times in terms of what the path is that we'll follow.

Please give some more information about the mix of DeeZee channels in 2025?

We don't present the precise mix. We look at DeeZee in a very straight word fashion. This is a brand. Perhaps it will go beyond 2025. But it should do PLN 1 billion in revenue. This is a brand that has a strong product, a really clearly defined product where the number of categories can be expanded substantially. We saw that with respect to apparel. This is something that will happen to an even greater extent. This is a product that enjoys a lot of recognition in several geographies in places where we're not present or on platforms where we have a presence. There are several methods in which pretty easy to grow. This marketplaces, geographic expansion, product expansion, so enlargement of categories, we're talking about a mix of all of these elements. We're not going to provide the split.

And we're gradually wrapping up the Q&A session. So we have 1 of the last opportunities to pose a question. Let's go on to the next question. The most particular forecast is the growth of HalfPrice top line. what is the concept sales density for this half price?

Well, generally speaking, today, we're pleased with how HalfPrice has kicked off its operations, we're going to be writing that history. Our plans suggest and where we want to be in 2025, we want to have sales of next some 800 to 850 sales per square meter. And so these figures are available in the presentation. We also have e-commerce sales, and we've talked about that delicately. We'll get kicked off in a few days. I've already received 2 parcels from HalfPrice. So this is something that's a happy user. So it started to work we want e-commerce to represent more than 20%. So be prepared. This is an incredible format, which is going to write its own story. And I think we're going to be related with that, pleased with that.

The next question is about the financial statements published by the group for the first 9 months of the year. What does other financial liabilities of PLN 444 million mean? What's that line item referring to?

According to the definitions under the accounting law and international financial reporting standards, these are liabilities with respect to provisions, liabilities, with respect to employees and public law liabilities. This is very similar to what we have in the interim financial statements end of June of this year. That's how I would respond or the end of the midyear.

So are you working on a lean bond framework. When will you publish information about that? Kryspin talked about that?

We have 2 things. First, there's interest amongst the market in terms of green bonds at CCC. And the other thing, the subject matter. So CCC, as you can see, it treats this as a very important strategic objective, but we're far along the path in terms of our ratings and awards we received. But in terms of having a closed economy and low emissions or zero emissions. And so we're at the early stage, conceptual stage of working on that, but this is an area to which CCC is open.

How are you thinking about -- what's happening in China in terms of video live shopping? Even though this trend isn't visible, do you plan to follow some plans in terms of pumping up the sales here?

Once again, going back to recent past. We were one of the first retailers in Poland to start testing in terms of live shopping. Even today, we can invite you to join us on Instagram at 6:00 p.m., and you'll be able to see one of the sessions. We're organizing at present for our customers. Next year, you'll be able to see much more -- we'll see much more live shopping under the CCC brand looking at the mobile application, amongst others, because our application, let me remind you, up until 2 million people monthly -- on a monthly basis comes through that. So lots of people every single day, we want to give them the opportunity to do live shopping. We're going to see what the take-up will be in Poland. Certainly, we want to be active in this let me add Karol talks about this modestly. He came from China, he said, let's do this quickly because this is what the future is going to look like. So we did live shopping 2 years ago. And once we saw the numbers, so it's not something that we have in front of us. It's something that we do and we've been doing for a longer period of time. Those are all of the questions that you've asked. So we'd like to thank you very cordially in for all the questions that you posed for being with us. I'd like to thank our speakers. Thank you very much. So once again, thank you very much. Bye-bye, and we look forward to seeing you at the next upcoming conferences with the CCC Group. [Statements in English on this transcript were spoken by an interpreter present on the live call.]