Good afternoon, ladies and gentlemen. I'd like to welcome you on the background of this beautiful picture of a beautiful product at the Earnings Call of the CCC Group. This is the earnings report for Q3. Two of us are here today, Łukasz Stelmach and I are here, and we'll talk about the annual results and the quarterly results, and the CEO will join us. I'd like to welcome you or encourage you to pose, urge you to pose any questions you might like to ask. We'll try to respond to your questions during today's session at the end of our presentation. So we now have completed Q3, and amongst market observers that they see quite a bit of emotion. We can say that we've done our work.
We did our job during this period, and you can take a look at what the results of this job are. The most important bullet points are as follows. Let me get out of the way, not to block your view. What's happened in the most recent quarter? First, we have stable sales level in the group year-on-year across the whole quarter. That's number one, and we did that despite the extreme anomalies of weather. We had the warmest September in 70 years. The second thing, we have a very good, robust profitability of 20% in CCC, and this was thanks to working on the gross margin, working in EBITDA, and a lot of good work done by the entire team. And this is in CCC.
The third thing that we've done, we have a 10% EBITDA profitability in HalfPrice, and we can see that as we continue to expand the store network in Q3. We opened another 12 stores. At the end of October, we had 121 stores, to be precise. Number 4, we're very pleased. We continue to reduce the inventory levels in Modivo, down 8% year-on-year, and we plan to drop below PLN 1 billion by the end of the year in terms of inventories. The fifth thing is the net debt in the CCC business unit is down by 40% compared to what we had one year ago. This is the fourth quarter in a row when we've been able to reduce our debt consistently.
Before we'll deep dive into the details, let's take a look at the various aspects of how we've performed our business model and what we've observed in the most recent quarter. Ongoing expansion of Half Price. This is something we just talked about a moment ago. After a mere two years from the launch, we now have 123 stores in 10 countries. So we can say that we are the clear leader in the Half Price segment in Central and Eastern Europe. We continue to open beautiful stores of Half Price in the best sites, best locations. So we have the flagship store opened in Prague at Wenceslas Square, or Wenceslas Square, and you can see that here in the picture.
It's a top location, more than 4,000 sq m , and from the very beginning, we have the best trading results of all of our stores. Eobuwie, we continue to expand the network of hybrid stores, and so this is done together with Modivo. We have the 50th store open. We are now present on five markets. The most recent one is in Romania, and we're very happy with that. Our product in Eobuwie, our product offering for Eobuwie and Modivo, we're closer to customers. Customers are able to come to the stores and return, make returns to the stores. This reduces logistics costs, and this has an impact on our profitability in terms of the business, in terms of also the transaction we have with given customers.
As you know, this concept is something that we've been developing in a unique way, unique across the globe, but we're treating this as part of our digital experience for the customer. In any case, this is part of the digital proposal we have for our customers. If we continue to follow this line of thought of what's happening in the digital world and how we interact with our customers, we are investing a lot in our mobile apps. CCC.eu, with the application, the app, is now responsible for some 40% of our e-commerce sales. We see a similar level in Eobuwie and in Modivo. We had a lot of downloads. We had more than six million downloads in Modivo, and the numbers have doubled over the last year in terms of the number of downloads. If we look at these three screens.
So we hope in the near future, we'll add the fourth screen, so the mobile app for HalfPrice. And this is something we want to integrate with CCC, as you can see. So with Uber, Uber Eats, we want to make sure that these two channels are integrated with one another. We see a lot of potential. There's still a lot of work for us to do, and so we will most assuredly report to you on that, about the good development of our mobile apps. Let's not desist. Let's go on and have a discussion of our financial results for Q3. The first thing that we'd like to talk about is look at the overall sales in Q3 in the group, in Q3 2023. So you can here on this bridge, you can see our top line performance.
This is what it looked like last year. We can say that all of our brands have dealt with unfavorable September temperatures. Customers did a quite a few things, but they rarely visited stores to buy clothes. But we had a pretty big base from Q3 of last year. But despite that, as a group, as you can see, we have revenue at a similar level year-on-year. So we can say the way we feel it, that as a result, we have a slight increase in the market. The biggest growth we can see in HalfPrice, that's 53% growth. Of course, we have growth in the number of stores of some 40% year-on-year. That's what we calculated. The second driver of sales is Modivo. We're pleased it's grown by 21%. It's also worth noting.
We should also look at not only the top line, but we should also look at the contraction of our inventories. In CCC, we're down by nearly 17%. We've entered the autumn season with a healthy inventory structure. In Eobuwie, so e-footwear, we're down by nearly 8%. This is in line with expectations, and we're on a good path in order to drop down below PLN 1 billion in the Modivo Group. In HalfPrice, we have an increase in inventory, but this is normal, and that's because of the growth in business, growth in the number of stores, and this is directly correlated to that. We continue to see growing shares of online sales. So we're well above 55%.
So if we look at the results in the individual segments, I'll talk about CCC and HalfPrice, and then Lukasz will talk about the Modivo Group, and then we'll walk through the rest of our financial data. So in CCC, in the omnichannel, so we can start with the online channel. So it's up 14% year-on-year, and this is something we're satisfied with, but we wanted to have more. If we look at the offline sales, so it was under the pressure of the high base from last year, but above all, this was affected by a very warm September. So the highest temperature in 70 years, 5 degrees higher than the average temperature for multiple years.
So you can see that sales were down, but we were able to offset that, more than offset that, by increasing our gross margin by more than 5% year-on-year. This is because we managed promotions, better purchases, and we haven't had any problems with inventories, and so that meant it was easier for us to give lower discounts and therefore generate a higher margin, gross margin. So at the same time, we're continuing our savings efforts, and we've been able to maintain a very rigorous cost discipline. We've done quite a bit of work and continue to do a lot of work as a team to do that. As a result, in Q3, we were able to reduce SG&A costs by some 17%, versus last year.
We should also mention, this is the fifth quarter in a row that we've been able to reduce SG&A costs year in, year out. So we're on this path, and we've been able to deliver. We are delivering. All of this taken together, so revenues, gross margins, and costs. In the CCC segment, we've been able to generate an EBITDA result of more than PLN 208 million , compared to a mere PLN 122 million from last year. If we write this as a percentage, this is nearly 20%. If we adjust that for FX rates and other one-offs, it's more than 22%. We wouldn't be surprised if this was the last thing we had to say. That's it about CCC.
I'm going to ask Łukasz Stelmach to take the floor now to walk us through Modivo.
So thank you, Karol. So we can say that we're the fastest, most rapid growing segment in the group. So we have 123 stores in HalfPrice, so we're at 45% gross margin, presently. So we're up 53% in terms of sales, but we're quarter-on-quarter, there's a difference of 6%. So if we look at the profit, it was a little bit higher, and it was PLN 41 million on a margin of 10%. Let's do a summary of what we see in the Modivo Group. So revenue is down by 4%.
Of course, we see Modivo brand is growing at 21%, and so we can say that there's still quite a bit of fierce competition on the market. We also had weather anomalies that Karol mentioned a moment ago in September. Costs are flat, and we have the inflationary impact. We have costs of marketing, which are needed to invest it in terms of supporting greater turnover of inventories. But as we mentioned, as of 2024, the situation linked to margin inventories and the investments in performance marketing will be normalized in the Modivo Group. So the inventory is down by 8%. If we look quarter-over-quarter, well, this is linked to stocking for new season. Nevertheless, we can say that as we continue to optimize, this had a negative impact on the gross margin, which was a little under 38%.
So we've talked about the results of the overall, of the individual segments, now we can talk about the results of the overall group. So we are above PLN 2.4 billion in terms of our top line in a single quarter. And so this is in line with our annual results and our quarterly results. So we've been able to improve our gross margin by 0.2 percentage points, and CCC has been able to improve its profitability by more than 5 percentage points. And so we were some 2% up because we've been able to reduce costs, and we didn't have a negative impact of FX rates in this quarter. So we've talked about the segments within the group. Let's look at the cash flow.
Year- to- date, at the end of September, we can say that we've been able to deliver a hefty portion of our EBITDA because we're optimizing working capital, and we're able to generate cash flow of PLN 900 million, nearly. As a result of the cash flow we're generating, we're able to finance the dynamic expansion of HalfPrice, cover our CapEx, and to stock up new stores. If we look at Modivo, we've been working on inventories. We've also been able to extend the payment terms for paying down liabilities, and this means that we have better operating cash flow results. So if we can look at the overall debt of the group. In the CCC business unit, which is CCC and HalfPrice, we continue to reduce our debt. We're deleveraging.
We're down below from the previous quarter, and we're at the lowest level since 2018. So we're utilizing lines of credit to a lesser extent, and this is because we're optimizing, networking capital and capital. We also are doing savings efforts in CCC, and we're also negotiating terms of trade with suppliers. And so we can say that we're down by 24% year-over-year, quarter-over-quarter. And so if we look at reverse factoring and guarantees, we're down by 15% quarter-over-quarter. And so if you look at, that's our net exposure. And so in Modivo, our debt is a little higher than the previous quarter, but this is primarily because of seasonal factors, so financing purchases for autumn, winter 2023, as well as the, capitalization of the interest on the loan from SoftBank, some PLN 36 million.
And so we can say it's at the same level, virtually, at, from quarter on quarter. That's it in terms of our Q3 results. Thank you very much for your attention, and I'll give the floor back to Karol at this time.
Thank you very much, Łukasz. So we're gradually wrapping up our presentation, and now I'd like to talk about the guidance we've given you, which we presented at the beginning of the year. Above all, we want to emphasize and underline that the key quarter is in front of us, so we have got Black Friday, the holidays, and we're going to fight until the very end for the end full- year results. We see the impact of the warm September. We see the business we've done in October.
We can say, as we sit here, this is a pretty good moment in time in order to give some commentary on the guidance we gave you at the beginning of the year. Here are the line items on the slide, which we described with numbers at that time. I'm going to try to illustrate where we are in terms of the guidance. There's no single number here. There's three businesses, a full set of data, so there's no one single response to that question, which would be fully precise. Well, at the end of the day, the final verification of the guidance, we'll be able to present to that to you after we wrap up the sales peak, so after, you know, November. The guidance, our commentary should be, well, we've been able to deliver some of these aspects in full.
Those are the green colors, and in some lines of business, we're coming close, but there's a risk that we might fall short in terms of what we had stated at the beginning of the year. So our revenue targets, but we should be close to our PLN 10 billion in trade or sales, so the margin should be quite strong in CCC. Nevertheless, if we look at profitability, the main factor affecting our capital position will be linked to Modivo's results. So in 2023, we can say we've been cleaning up the Modivo Group from its excess inventory levels, and this process has been a bigger investment than we could have imagined at the beginning of the year. And we have a temporary decline in the margins there, and at the same time, we have higher marketing costs, performance costs for marketing, marketing performance costs.
All in, if we look at our guidance and the EBITDA that's implied by that guidance, which was presented as a figure, and so first, we understand well the consensus, which is in excess of PLN 800 million for the whole year, for the whole group. We believe that this could be a reasonable expectation by the market. That's it about guidance. And now, as we come closer to wrapping up our conference, we can sum up what we see here. And as we've said to you previously, we would like to remind ourselves and emphasize that we have the five most important things, which we've observed in the past quarter .
These are important things from the point of view of our business, while we have flat sales, despite the fact that the context, market context was not very conducive, so that's a pretty good end result. The next thing, we've continued to improve the profitability in CCC by leaps and bounds for another quarter. So HalfPrice continues to grow with great headroom, both in terms of size and profitability. The fourth bullet point you see on the slide is we're able to shrink inventories in Modivo Group by some 8%, so we were able to do that in CCC. So we believe that we'll be able to have a similar set of circumstances in Modivo, and then we'll have normalized conditions for doing our business, plying our trade.
Then the fifth bullet point, which is also very important to us and to you, this is another quarter in a row where we've been able to deleverage the CCC business unit, and this is something that we will continue to deleverage. We're going to reduce the debt there.
Welcome, ladies and gentlemen. We're going to go ahead and kick off the Q&A session. Let's look at the first question. What scenarios do you see having in mind the maturing bonds for SoftBank in terms of Q3 2024?
Perhaps I'll begin and respond to that question. So in August of 2024, that instrument will mature, and we're talking with our partners from SoftBank about extending that rollover, that term of maturity, and we'll be able to inform you of that in current reports.
When do you anticipate that you'll be able to bring, make the results of Modivo healthy?
You already responded to the second part of the question, so we have the first part of the question. In terms of the first part of the question, let me respond to that. If we look at the results of Modivo, as we've emphasized multiple times, the most important thing is to improve the structure, the mix of our stock, and sell down what we have from the past, and this is something that we continue to do. We can say that in October 2023, so the most recent month was the best month in terms of EBITDA since May 2022. We can really see that this trend is good, it's a positive trend, and this trend will be continued in upcoming months of Q4.
But as we've said, we will see market improvement in 2024, along with the spring, summer season of 2024, and, once we have a really good inventory in place. If we look at the operating result for Q3 2023, is materially lower than in Q2 of this year.
Why do we have this deterioration, even though you've done so many things to optimize results?
Well, the differences are the result of FX rates, primarily, which in Q2 2023, we're up nearly PLN 40 million because of FX rates. And in Q3, we had a similar amount, but it was minus. So it's, I think, it was PLN -35 million at the group level. I think a better metric would be the adjusted EBITDA. Well, in Q3, it's clearly better than in Q2, so PLN 240 million versus PLN 185 million.
So we would say, we should compare these quarters based on adjusted EBITDA. Well, the current Omnibus Directive is actually deteriorating on a long-term basis, of how you manage promotions in e-commerce.
So we don't believe that should deteriorate on a long-term basis.
How you manage promotions in the e-commerce business?
We are fully aligned with the directive in terms of what it forces market players to do. This is nothing new. As the market leader, we believe this will actually help us, as we transparently communicate with customers, to make sure that this rule will apply to all players. So the reputable blue-chip players, like ourselves, but also the smaller players, which have to operate or conduct their businesses according to the law, in compliance with that directive.
In your opinion, with a good IPO of Modivo, will it be possible in 2024, having in mind the EBIT, full- year of 2023 being below zero? That's the hypothesis in the question, in the question.
Well, I would say yes, and let me expound on that. In 2023, for Modivo, is the year of destocking, and we can forget about the old problems. In 2024, we have a profound hope that this will be a normal year . And we'll have a good gross margin, no worse than historically, the margin we've seen historically, and we won't have to destock ourselves. The company will use this time well, in terms of market acumen. So technology, or as Modivo sees customers, or CRM, or loyalty programs, it's becoming a better company.
So having in mind all of that, having all that in mind, so if the markets will be buoyant in 2024, then at the end of 2024, I would say that the IPO is clearly possible with, you know, a good 2024 behind it, and an even better year in front of it in 2025.
Does the company have room to improve its gross margin in the CCC brand, where it was some 59%? And what is the outlook for the gross, gross margin in other brands?
Perhaps I'll respond on that. If we look at the margins in CCC, we have been improving them quarter from quarter to quarter, and we haven't said our last word. A lot of good things are happening. We mentioned this during the previous conference. The CEO mentioned that.
And so if we think about the prospects for the CCC margin, I think when we sum up the annual results and then Q4 results, the CEO will address that issue. We see additional room to grow. If we look at HalfPrice, we already mentioned that we continue to improve our margins from quarter to quarter, and so we had some factors that basically had a negative impact short term, but things will improve. So we think that the HalfPrice margin will come back to the level that HalfPrice accustomed us to a few quarters ago. If we look at Modivo, we've explained multiple times why we have this temporary downward movement in the margins. So we believe that once we put our stock in order, this will give us a lot of room to grow our margins in Modivo in 2024.
If the external factors will give us a boost, like the U.S. dollar rates or freight expenses, but above all, we're focusing on those factors that we can influence.
So do you see room to reduce costs? If so, to what extent?
Yes. We see additional potential. We've done a lot of work already, but there's still a lot of work for us to do. The profits won't be as high as they have been in the past, but this is something that we will continue to deliver. You can't see everything in the results for the last quarter. In the future, we want to continue cost optimization in our sales channels, in the offline channel and the online channel, in logistics and performance marketing, also in working hours and rents. There's work for us to do everywhere.
We're not entirely satisfied and content, so we'll continue to work. So what's happening abroad is a good example. If you look at some of the markets, we have potential that's relatively greater than what we've been able to extract here in Poland. I understand we have a similar question to Modivo. So we can give you an example of performance against trade or sales, if we're reducing stocks, that's something that costs in the margin, the cost of transactions. So we're down by a few percentage points. We have a reserve there that we want to be able to show in 2024 by reducing our overall marketing expenses, including performance marketing expenses in Modivo. So these are things that you'll see.
Where are you in terms of the debt refinancing agreement? It was supposed to be ready by the end of 2023, 2023.
Will flat sales results in the CCC Group in Q4 will this cause you to delay that agreement? And do you have alternative scenarios h aving in mind this circumstance, if the Q4 results were to prove to be softer?
well, debt refinancing is one of the priorities of the group, the company, in the upcoming months and quarters. And as we've said multiple times, in order to do the refinancing on our terms, the terms that we have, we have to improve our results. And over the most recent months and quarters, we've been working to do that, and I think what we're presenting today shows and demonstrates that the work we've done is producing results, especially in terms of costs, the EBITDA performance of the business unit, CCC business unit. So we have an advisor.
We believe that the results of Q3 are a good base in order to make our talks more concrete with banks. So the key scenario we're talking about is working with banks, and based on Q3 results, we've proven that we've improved all of our bank ratios. So in terms of the same ratios we have, we're going to have materially lower cost of financing next year. So we're on the path that we had assumed, and this should enable us to refinance our debt in accordance with our assumptions. So you have made impressive cost savings in SG&A.
Where did you do this? And is this the beginning of a trend for upcoming quarters?
Generally speaking, yes. Just as I said a moment ago, we want to lay the foundation for refinancing as we talk with our banks, for refinancing, improving our results.
Regardless of the macro circumstances and sales, we've been focusing on costs, and we assume that this effect we've been able to achieve will be continued more and more. Moreover, we assume that Q4 should reveal the full extent of the efforts we've launched previously because of a certain amount of cost inertia. In terms of what we focused on, we've been able to have more effective marketing expenses. This was an area where we spent quite a bit, and so we're looking at this much more selectively in terms of the costs we're incurring in marketing and payroll expenses and optimizing teams. We've made quite a bit of savings. We have better returns on our performance marketing expenditures. In terms of stores, the payroll expenses, we're also tracking processes in stores, benchmarking them.
And so even though a minimum wage hike has been in place, nominally, we've been able to reduce the cost of our stores, and we're also focusing on rental expenses. So this is one of the more important cost line items we have. And, so we don't have automatic indexation. We have also clauses that cap cost increases linked to sales results, and these are efforts that will be continued. Thank you very much.
Next question: What's happening with sales in CCC Group and under the various brands in early November?
Perhaps I can respond to that. At the beginning of November, we're pleased. I t's not sensible to discuss the results of a few mere days at the beginning of November. We have the full quarter in front of us, so we really don't want to build expectations on the basis of too short of a period.
We know how things moved dynamically in September and October. We're working hard. We have Black Week, we have holidays period, we have HalfPrice. Then, we will know what Q4 will bring i n the Modivo Group.
T he Modivo brand revenue represents 92.9% of total sales. Does that mean 29% of your sales are apparel, or are you also selling a lot of shoes or footwear, footwear?
Well, let me comment i n terms of Modivo. W ell, Modivo consists of apparel and footwear, and footwear is a much smaller percentage, is less than 1/3 of the Modivo brand. But in terms of the customers that are visiting Modivo, we want them to have the widest possible array of products they can purchase. So if you buy footwear or apparel, we want you, customers to buy some other product ranges. That's why it's not so narrow.
Cross-selling was one of the targets we had when we launched the Modivo brand.
Based on your results today, does the management board of the group think that there's a risk of not meeting your financial covenants that are applicable with your bondholders and banks?
No, we don't see that risk. Moreover, the improvement process, we're improving the financials. This means that from month to month, we're de-leveraging the group, and so the headroom, the surplus we have, is bigger and bigger, so we don't see any risk whatsoever.
In the CCC segment or in the CCC business unit, the group is obligated to reduce by some PLN 350 million. To what extent have you been able to complete that thus far?
Well, I'll respond to that.
Well, this process is being done in full compliance with the banks in terms of the deadlines, even ahead of those deadlines, in order to reduce the cost of financing. So at the end of the first three quarters, it's been reduced by PLN 160 million, the debt. And so we're obligated to achieve that, and so we should drop that by another PLN 160 million. And so this means we'll be fully compliant with what we agreed to do.
So you've partially responded to this question, but let me read it because of the second part of the question. When do you think you're going to be able to rebuild the gross margin in the Modivo Group? But I would ask you to talk about this from the point of view of the market competition.
As we told you, 2024, this is what we assume, will be a year of normal margins for Modivo. By the end of the year, we want to have our inventory down below PLN 1 billion, and we want to run this business without that pressure, which was quite important, and is important across the entire 2023 year, where we had excess inventory. So we wanted to get rid of that. So 2024, so from the beginning of that year, we should have a normal market-based gross margin in line with what we're anticipating. If we look at the competitive environment, the most important factor affecting or contributing to that lower margin, it's not what the competition has been doing, because everybody's trying to save money now in terms of costs, marketing expenses. Well, this excessive inventory, excessive stock, is the major contributing factor.
So it's not so much the market competition, which would somehow be an obstacle for us to rebuild our margins in the Modivo Group in 2024.
Do you still have the potential to reduce SG&A costs in the CCC Group, having in mind the minimum wage hikes in 2024?
Well, the costs of minimum wage will have an impact on our cost base in the stores, both in Poland and in other countries. In Central and Eastern Europe, inflation is omnipresent, it's ubiquitous, and we have regulations present almost everywhere, where these hikes in minimum wages are taking place. So this challenge does exist. At the same time, we're going to reduce the total number of working hours. We're working on what's simplifying the work in the stores.
We're trying to make some savings, motivation systems, and so on and so forth. So we want to make sure that the higher cost, the impact of higher costs driven by minimum wage, will be reduced to a significant degree. Let's remember that the increase in minimum wages also make sure that our clients have greater spending power. So oftentimes, our customers don't have very high salaries, and with their additional spending power, since we have a good offering, we're hoping that a portion of that money, CCC will see in the form of basically higher sales performance.
So if our stores could operate on Sundays, would that be positive information for the group or not?
Perhaps I can give some commentary on that. We've been observing this discussion about whether or not we'll begin trading again on Sunday. We don't really want to comment on that or speculate.
Once we see the specific proposals, then we'll be able to respond to those specific proposals. In HalfPrice, we can see that year-on- year, and quarter-on- quarter, sales density per square meter, is flattening. Well, if you look at sales density comparisons in the short term can be muddied by opening of new stores. So we've seen some pretty major store openings or store adds, and that can actually make these type of comparisons more murky. So if you have a store opening in the middle of a month, this actually makes that comparison or benchmark less clear. We're thinking about like-for-like sales as our key metric, and here our ambition is to grow on a stable footing by a double-digit figure year in, year out. And so we're thinking about 11%-12% like-for-like sales performance.
That's a key parameter for us.
Do you plan to change your product ranges strategy for e-footwear for Eobuwie?
I would say and respond as follows: we're continuing our policy as the market leader in e-footwear. We're offering customers a broad offering, wide choice, and in a way that's beneficial and favorable to both parties, So to us as an, a seller and to our customers. And so this is the main axis that will define our product range strategy. Here, we don't want to comment on that too extensively. We live in a competitive environment, so if you'll allow us, we won't divulge detailed aspects of that product range strategy. But as a result of that, we want to improve our results.
What is your current mix or structure of inventory in Modivo Group, so old versus new inventory?
Let me comment on that.
Two-thirds of our stock is the new stock over time, and as we're destocking, the percentage of new stock will grow. And this is linked, of course, to the seasonality of our sales. So the full effect of destocking will be visible in spring, summer season, 2024. And so that gives us the greater potential to have a higher margin. So we can see the development of these hybrid stores made a bigger impact.
Is it a good idea to extend or grow this channel, having in mind the current results of the group?
During the presentation, we showed you that these hybrid stores are part of our overall proposal, our overall digital experience or journey proposal in the Modivo Group. It is something new from a client perspective.
This is something that we continue to develop, and we believe that the hybrid store is part of that interaction with customers. Well, this is something that is being developed, so we see new customers, we see returning customers, and in a way, this is a fixed marketing and solicitation point where we can attract customers. So we have Eobuwie and Modivo working on two engines, so we don't want to have twice the number of stores next year. But what we've put in place is one of the fundamental bits and pieces that will make sure that we distinguish ourselves in terms of e-commerce. It's an important distinguishing element in terms of what we're doing on the, e-commerce market.
So for many customers, the fact that you can have a physical contact with, face-to-face contact with an employee in a store when you drop into a shopping mall, and so this is one of the important things that we'd like to maintain.
So do you assume that in Q4, that CCC in HalfPrice will have much better results, or do you think that starting in Q4, that will also have improved profitability in the Modivo Group?
Let me say, as we said, when we responded to the question about the early November, we don't want to put forward any specific forecast of results. We fight for every quarter, and it's not something that we give up in any one of our brands. We're trying to extract what we can.
Q4 has the greatest potential for HalfPrice, because that's the brand where you have the sales for the holiday period, and close to the holiday period, this is probably where they have the highest level of sales. But we're fighting for the best possible results in all of our brands.
One more question about the Modivo Group. Do you plan to have smaller purchases for the spring season, having in mind that you're optimizing your working capital?
Here, well, having smaller purchases is not the only parameter that the Modivo team is working on or is guided by in terms of reducing stock. The depth of the stock, the quantity of stock, payment terms, delivery terms.
So, and how much working capital is needed in order to have the ability to finance the total volume of stock, some of the shortcomings from the past?
Well, this was something that was became more painful because of the market crisis. We think this is something that we have put behind us.
Why, and despite the major growth rate of sales, why hasn't HalfPrice improved its EBITDA?
If you compare things year-on-year, there is a difference in terms of the gross margin, and that's probably the main reason why we don't have major growth of in EBITDA. But well, it's coming back to the levels that HalfPrice accustomed us to in the past. So we can say that lower margin will be expired. We had quite a few new store ads, and that means that your costs are higher and the full sales potential has not been displayed. But we should compare costs to revenue, and we continue to improve that.
So you can clearly see the operating leverage, and that's why we're calm in terms about the results to be delivered by Modivo in the future.
So interest rates fell by one percentage point. How much are you saving as a result of that?
More or less, that's more or less PLN 1 million per month in savings.
Thank you very much. That was the final question in the Q&A session. We'd like to thank you very warmly for participating in our conference and for all of the questions you've posed. We'd like to invite you warmly to attend the next conference, which will be in early February of 2024.
Thank you very much.
Thank you very much.
Okay, thank you much. Bye-bye.