Good afternoon. We'd like to welcome you to the conference to discuss the results of Q1. At the beginning, I'd like to tell you that you can pose questions, and we'll field those questions, respond to them during the Q&A session. We have had a one-month interval, so today's presentation will be slightly shorter. We've addressed a number of the topics at the previous presentation, and without any undue delay, I'll go ahead and discuss the key events during the most recent quarter, as well as the things that have been happening at the beginning of Q2. Here are the five key events which define what's happening and reflect on what's happening in the company in this quarter. We've a high increase in revenue in a very demanding environment.
We have another improvement in the margin, gross margin of the group, and this is happening by leaps and bounds. The results of Modivo are much better than the competition, and we have a very good beginning of Q2 in terms of sales. Margins are above assumptions, above targets. Let's take a look at the most recent results, the most recent events in the company, in the group. We'll start with sales. Sales are up by 33%. That's a lot, but we had an appetite for more. As you know, the environment was not something that was conducive. We had another wave of COVID, the outbreak of war in Ukraine, then the macro environment.
We can say that the high inflation and the increasing interest rates had a major impact on consumers, and that means that consumer trust in February and March was on an average long-term bottom. If we compare sales in February and March, we can say that March has started to rebuild sales. April has been very strong. This week, the Central Statistical Office published results, and so things are up at full prices at 30%. We had much higher growth rate even though we had a higher base because a number of our stores hadn't opened in April of last year. We can say that all of the brands are up. E-commerce is up 55%. It's a little bit less than last year, but this is a result of the base effect. 55% is e-commerce.
A lot of this is happening in omni-channel, and so this is a spectacular result. This shows that e-commerce that we have in the group, in the CCC Group, and this channel is operating well in terms of the growth rate, and you'll see also in terms of the profitability. Let's take a look at what's been happening in the various segments of the group. Let's begin with CCC, which is the omni-channel leader in the footwear market in Central and Eastern Europe. CCC made a major contribution to the sales in Q1. We can say the brands and sales have moved up by some 40%. What stands behind the good conditions? We have very good product KPIs if we look at the retail factors. As you can see, the number of units on a ticket.
We have complementary products. The communication, the promotion. We've been able to improve the number of units by 14% on a ticket. Since we're managing the first price actively and then having premium brands, so Quazi, Togoshi, Badura, we've been able to increase the average value of the tickets. This is up by 25%. That means we've improved the sales density per square meter with respect to the corresponding quarter. It's up by 15% than what we had in 2019.
If we look at this along with May sales, we can say at CCC, if we look at the last 12 months, which also include this first quarter that wasn't too conducive to us, so we're at a quarter which we most recently had in June of 2018. Frequently you've been asking us questions. I remember when you were asking these questions when we were meeting face-to-face, and we'll probably come back to face-to-face meetings, and you were asking, "When will that rebuild take place?" We can confirm that it's taking place as we speak, and we anticipate that from quarter to quarter, things will get better. Traffic is down because I mentioned some of these effects linked to the pandemic, especially in February.
We had the war, and we can basically say that traffic, maybe I'm exaggerating, basically was nearly zilch for a few days because the world stopped and people were watching their TVs and couldn't believe what they were seeing. Despite all that, having in mind the very good conversion factors and the quality of the product offering and communication, we've been able to improve our sales considerably over 2019. At May, we're very close to what we had in 2018 in a totally different model that's scalable. It's based on digital sales with a high-quality product, and we have a high-quality offer, and it's been well-calculated. We're starting to do some really good planning with respect to the product range. Today, we can think about leveraging our unique omni-channel approach to trade, which is the most sophisticated approach in this part of Europe.
We're gonna be able to build even higher gross margins in CCC and improve our rotation. That means we'll be able to release working capital from our inventory. One day of improvement is PLN 5.5 million in cash released, and this will be our response to rising interest rates, and we'll talk about the strategy, and we've been talking about this consistently since November of last year. Let's go on and talk about Eobuwie. We have also good events in some of our other lines of business. Eobuwie, we have processes, efficiency, technology, logistics, and basically it's a multi-brand specialist in terms of Eobuwie. We're leveraging that unique model, which is fascinating. It's omni-channel. We have hybrid stores which combine basically retail with e-commerce.
This is primarily known in Poland, but we'll also see it in other capital cities around Europe, like in Czech Republic. Our customers are in love with this more and more. We can say that these stores are basically enjoying huge hordes of customers coming in. From week to week, more and more people are coming in. That means we've got very good e-commerce, which is also supported by the omni-channel approach. This is what customers are choosing today. What we would like to emphasize here with respect to Eobuwie in terms of Q1, well, we continue to see changes in fashion trends, so casual leisure sneakers. We flagged that in our Q 2022 strategy.
This is something that's a very clear product range trend, and we wanna build on that product range trend and have above average growth rate and position ourself there. The Eobuwie is benefiting from these changes. We can say that these categories have grown their share by more than 10%. This is not happening in and of itself. We're helping this process. We're massaging this process by utilizing campaigns, addressing and targeting these product ranges. We have a new team, MODIVO Advertising Services, which is in Eobuwie and Modivo. It's an ecosystem, if you will, which has been set up along with the brands, and it's co-financing, co-creating marketing campaigns along with the biggest brands, which means that we can promote a given brand, so Modivo or Eobuwie. We are building collaboration, and this is something that's working very well.
You can see that we're gonna have very measurable results in upcoming quarters. We're also strengthening Eobuwie as an expert in multi-branding, footwear. We have creative campaigns which engage customers in terms of what's happening with a given product category. Here's an example of a promotion of a active lifestyle, and it's very fascinating. These are things that elicit admiration from the West Coast of the U.S. This is something that's unique in the world of trade. We have esize.me, meaning we're scanning people's feet, the interiors of shoes, and we have special inserts, and we've done this professionally in order to select running shoes for people. It's very important to think about the type of feet, the pressure, and to ensure that everything is fit on the size of the shoe and the surface area.
We've been able to promote this. We have impressive growth of some 50% above the average. Performance has grown by 260% in Modivo. As we indicated that, you know, Modivo's grown at 60-some% on average. When we're talking about Modivo, let me tell you, this is a story of dynamic and really profitable growth. Of course, we're compared to pure e-commerce businesses and other e-commerce businesses, and that's probably fair, and it's probably natural. We can see that Modivo is very clearly standing out. It has high pace of growth, a high level of profitability, a lot of potential, which means that we have a dedicated team working on Modivo. Step by step, month by month, we're going to exploit those features.
We're gonna enlarge the offering utilizing the marketplace and do this in leaps and bounds. We're gonna do that jointly with the wonderful team. Modivo means we're also strengthening brand recognition, and we're creating and shaping communication, shaping our image. Modivo is the expert in fashion. It's very important as we cultivate relations with customers in the ecosystem in Poland, Europe, and beyond. We're building the brand recognition of Modivo, but we're also looking at some of the third-party brands which are sold through Modivo, and we have wonderful collaboration. Recently, we did something with adidas, and we're also promoting our own brands, which we have on Modivo. We have seven brands on Modivo. We have Simple, Badura, Americanos. These all of them had their relaunch on Modivo. Customers are seeing them.
We're seeing that we have interesting business stories of reactivation relaunches, and these things are very fashionable because fashion likes to look back at what was already popular and rejuvenate it. Why are we doing that? We have wonderful growth, much higher, many times higher than the rest of the business. Of course, we have a high margin, tens of percentage points above. Let's remember that CCC has multiple channels of sales, so storefront as well as digital. Let's go on to the next brand. On the 24th of May, we celebrated our first birthday, so it's basically a year, a little under a year. We have PLN 355 million in revenue. One year ago, this wasn't there. We have 16 million customers, 14.5 million from Poland.
We can tell you that among the adult population, nearly every adult has been able to come into contact with HalfPrice. We're building on the potential of HalfPrice. We have a wonderful, dedicated team that knows what it's doing. We have 66 stores at the end of the quarter, so now we have 67 on average. We have one opening a little over a week, we have a very good expansion investment team and a very fast pace of growth and rolling that out, and it's great to see what the quality with which we're doing it. We wanna have 100 stores by the end of the year, seven countries. We have the skills to roll this out across the region. This is not so easy to go into other markets.
We've been able to penetrate them, and we can be satisfied with the sales results. Well, another thing that distinguishes this concept, and this might seem paradoxical, the domain and the specialty of CCC, so online e-commerce, after six months of starting, we have 5% of our sales coming from digital sales in HalfPrice. We have a wonderful, dedicated team, which has a large number of ideas about how to develop that activity. Great operations, and we're building the recognition, brand recognition, which is driving up sales density, top line, and profitability. We're improving sales density by having a richer offer. We have the home category recently. We have sweets next to the cash tills. These are very tasty morsels. We're building it out through e-commerce as well.
We're expanding, so we can anticipate that the scale of this concept will grow geometrically. This concept needs scale, and we're gonna start to see very good profitability and a very nice model in terms of the cash conversion cycle. I'd like to thank you for this part of the presentation. I'm gonna go ahead and give you the floor to Kryspin Derejczyk, our CFO, who will tell you a little bit about the results in Q1 of this year.
Thank you very much, Marcin. Good afternoon, ladies and gentlemen. Let's go ahead and discuss the financial results of the group. I'll talk about the segments of our operations, and we'll begin with CCC omni-channel. At the beginning, I'd like to point out that the financial data do not include the Russian company.
This is now part of the discontinued operations. We continue to optimize our store network, the brick-and-mortar store network, and that means we've reduced the sales space by 3,000 sq m. That's because we're converting into HalfPrice and reducing that sales area. We have PLN 500 per square meter, and 60% rotation year-on-year. The growth could have been even higher. There is some distortion because of the outbreak of war in Ukraine, and there's also consumer uncertainty as a result of rising inflation, which had a negative impact on traffic at the beginning of the quarter. Naturally, if we look at these changes year-on-year, we have the low base effect from last year linked to the lockdowns that were in place at that time.
I would mention that sales per square meter incorporates online, which is PLN 90 , and this shows you how important being omni-channel is to us. On account of last year's base, we can say that retail was growing faster than online, so 50%-some versus 18%, and that means that generally the top line in CCC grew by 42%. If we look at the dynamics or the growth rate of online, it's not as high as in previous quarters, but we can see that some of our competitors have top line falling in this channel. The most important point here is the gross margin, which we've been able to improve consistently and steadfastly. In Q1, it's 50%, which means that we've improved the gross margin by 9.1 percentage points year-on-year.
All of this has been done in very demanding, tough, macroeconomic conditions. The results of the last quarter show once again that by having a conservative price policy and rebate policy or discount policy, this is something that actually delivers the intended results. I would also mention that we also have a positive contribution from the OMS system, which is now operating in three markets. We mentioned this at the previous results conference. If we look at the activities to support margin, we have a lot of these type of activities, and this is very important in terms of the inflation pressure in the supply chain. Let's take a look at the costs at this point in time.
We've reduced the costs as a percentage of sales by 9 percentage points almost, and this is a result of the operating leverage, but we also have improving cost efficiency and processes, and this is primarily because of the costs of our sales points of sale. We have 25% increase for costs and some 24% for sales. I think it's worth mentioning that the costs in Q1 of last year included financing for COVID purposes on international markets, and we have the improvement of gross margins and reduction in the cost ratio. That means we have an improvement of 18 percentage points year-on-year in terms of the segment profitability. We can see this also on quarter-on-quarter basis, so this is a difference of 7 percentage points on a quarter-on-quarter basis.
Let's take a look at the results of the Modivo Group, and we can start with the Eobuwie segment. In Q1, Eobuwie had a 12% increase in sales year-on-year. If we look at the very high base from last year, the growth rate is lower than the one that Eobuwie had accustomed us to. Let me draw your attention to the fact that some of our competitors had negative growth rates in the previous quarter. In our opinion, the sales could have been higher, the result could have been higher. But just like with brick-and-mortar sales, we can say the macroeconomic environment and the outbreak of war in Ukraine had a negative impact on consumer sentiment. Of course, we're pleased by the fact that the gross margin continues to improve up to 43.6%.
We continue to see room to grow and improve. We can say that, you know, the brand is more and more of a partner for other brands. In Q1, we can say that we had some cost of development, but the profitability was quite acceptable. We've seen the first effects as a result of higher sales. Now we can look at the fastest-growing segment in the group, which is, Modivo. The growth rate, as in previous quarters, wasn't a triple digit, which is something that Modivo had accustomed us to, but it's still very impressive if we look at that growth rate. In this quarter, the growth rate was 68%. This is linked to the fact that we had the high base from last year.
I think it's worthwhile to note that this represents 18% of the global sales in Modivo Group. We should also mention here that we've tripled the growth of sales of Modivo in Germany and Italy. The gross margin at 41% according to the statements, which has been improved by 0.7 percentage points year-on-year. This is a result of the scale of procurement. We see a decline in segment's profitability of Modivo. This is because of the expansion. This is a matter of one of the things that contributed to that was starting the marketplace. How has this contributed to the overall results of Modivo? Let's say first, Q1, we had the revenue in the Modivo Group was up 19%.
Second, the growth rate was affected by the very high base from last year, as well as the macro and geopolitical position, situation which I mentioned previously. We're not stopping here. Our goal is to continue growing Modivo, and that's why we're starting up a new logistics center. We're gonna have a marketplace in place, and we're gonna have sales support tools. We're investing in software development, and we're also improving the quality of internal processes. This means that the cost ratio is growing, but we anticipate that this investment will deliver results in the upcoming quarters. The fourth thing, we've reduced the marketing costs by 0.5 percentage points year-on-year and by 3 percentage points quarter-on-quarter. We're doing a lot of intensive work in terms of rationalizing and increasing the effectiveness of variable costs.
We've maintained the EBITDA profitability at 6.6% despite the investments along with the GO.25 strategy. We can say that this is one of the most attractive e-commerce projects on the market in Modivo. After the publication of the preliminary sales, you could have seen that it was limited having in mind what, you know, the competition had reported. Let's take a look at what's happening in revenues and margins in HalfPrice. In Q1, HalfPrice generated almost PLN 119 million in revenue. That's almost 7% of the sales of the overall group. In Q1, we opened 16 new stores.
As you could have noted on the slide presented by Marcin, most of them were set up at the end or opened at the end of the quarter. That's why their contribution to revenue on a quarter-on-quarter basis wasn't so big. As we continue our expansion and rollout, we'll have another 50 stores. That means that sales will continue to grow. That's our expectation. In 2022, the full year, we should be able to come close to PLN 1 billion in revenue. The gross margin was nearly 46%, which means that the level is in line with our GO.25 strategy. That means in Q1, our margin was affected by two months of sales, which had an unfavorable impact. At the same time, we improved rotation and we were able to release capital in order to purchase the summer collection.
I think it's worth mentioning here that we continue to expand our offering. We're adding new premium brands as well as home, category brands. I would also mention that we see clear improvement in the margin in the initial period of Q2. Let's go ahead and summarize the results of the overall CCC Group. Attention, we'll have 33% increase in sales. That deserves our attention. Our margin has been improved. Our gross margin has been improved by 5.3 percentage points. If we look at SG&A costs, they've grown by nearly 1%, you know, year-on-year. This is linked to incurring expenditures for HalfPrice and starting the marketplace, as well as implementing an IT system. If we look at costs stated as a percentage of revenue, we can see that this is a result of sales being lower than we anticipated.
The increase in costs, as you see in here, is something that's under control. To a large extent, this is an investment, and this will enable us to achieve our targets from the GO.25 strategy. The group has generated an EBITDA result on its continued business of some PLN 89 million. That means we have an increase year-on-year of PLN 59 million. The EBITDA margin is close to 5%, where we have an increase of 2.5 percentage points. I would draw your attention to the fact that there's a difference between the prelims and the presented results, and this is a result of two things primarily. First, we had the exclusion of the Russian company because it's now part of discontinued activity, and we also had the impact from FX rates. Let's take a closer look at costs now.
If we look at SG&A costs stated as a percentage of revenue had grown by nearly 2 percentage points had we not made investments in development. As stated in the GO.25 strategy, like HalfPrice rollout, we would've seen a decline in this ratio by nearly 4 percentage points. If we look at the costs in Q1 versus Q4, we see a decline of PLN 30 million. That's despite the fact that we have more stores from HalfPrice. Now let's take a look at the second important aspect, which is cash flow. As we mentioned previously, we continue to invest in the development of Eobuwie, Modivo, and HalfPrice. That means the debt has grown by PLN 400 million to PLN 1.9 billion quarter-on-quarter.
Let's remember, in this debt level, we have PLN 500 million of investments from SoftBank into Modivo in the form of convertible bonds. At a certain point in time, we should assume and posit that those bonds will be converted into equity. We have a clear change in working capital. This is a result of the dynamic growth and the fact that we're building inventories for the new season at Modivo and HalfPrice. If we look at the cash flow, we also have lease payments as well as the interest paid and accrued. If we look at cash flow, the changes in working capital have a major impact. Optimization here will enable us to finance ongoing growth of business to a great extent. The second quarter in a row, we see clear progress, especially in CCC.
The level of the decline in the level of stock inventories and improvement of rotation are very visible. Our goal, let me remind you, under the GO.25 strategy, is to get the rotation down to 200 days. We're at the beginning of this path. We can see progress being made here. We've reduced it by 20 days since the end of 2021. Let me mention here that one day of improvement in stock rotation or turnover, which is a PLN 5 million reduction in investment in working capital. The revenue has grown faster than stocks have grown or inventories have grown. This in Eobuwie, in Modivo, in HalfPrice, this is where we've seen that increase. In CCC, despite higher sales of some 42%, we can say that the inventories have fallen by 11% year-on-year.
That means the cash conversion cycle has improved by three days in the group. Thank you very much. I'm gonna go ahead and give the floor back to Marcin at this time.
Thank you very much, Kryspin. Let me begin the recap with what customarily affects the group results and why our customers are showing up in our points of sale. We have a very good, fashionable, and high-quality product. We're pleased with our preparations. We talked about this at the previous conference, and even prior to that, when we were talking about the summer and the spring collection, we're well prepared in terms of quality, in terms of quantity.
The scope of the offering and to sell the spring and summer collection, we knew that at the beginning of this season, and we can see that really clearly now at the beginning of Q2. Let's take a look at what our brands have prepared, things that are new. We always have something new, but we're always adding something that's even newer to what we have announced. We have the Just for Fun campaign from Sprandi, which is thinking about the development of some of the smaller dimensions and sizes of Sprandi. That means Sprandi and CCC, along with the communication channel, along with Gen Z. This is something that's being more and more frequently chosen as the place of purchasing shoes, footwear for children and youth. We're very pleased. This is one of the strategic axes of our GO.25 strategy.
Let's think about slightly older customers in Sprandi. We're talking about Generation Z. We have the campaign with Finn Wolfhard, who's a star in Stranger Things on Netflix. He's the icon of Gen Z, and we have a wonderful result in the first portion of the campaign in terms of marketing communication, increases in top-of-mind brand recognition. We're also building up our sales position. We see how well that campaign, communication campaign is working, and we're elated with that. This is a clearly good step, and this shows us the new CCC, and this means that we're expanding our product category. We have not just footwear, but also apparel. In Q2 and Q3, we have a large number of activities linked with Finn, and we're hoping that the Sprandi brand will have more and more hype.
That's something that young people like, and we're not worried about that at all. Tomorrow would be the premiere of the fifth season or the next season of Stranger Things. The Sprandi brand is working with Finn Wolfhard this year. This begins tomorrow. We have another, DeeZee, which is another brand in the CCC portfolio. We're working with Małgorzata Rozenek-Majdan. She's a star in Polish TV. She's an influencer. She's one of the more popular celebrities in Poland, and she has a dedicated target group, which is very coherent and consistent with the DeeZee group target audience. Małgorzata Rozenek-Majdan has a capsule collection for DeeZee, some 43 units. This is well-known in CCC. This is an additional purchase impulse and an impulse for us to sell more. We have a high level of sales.
In some of the models, 100% is sold out immediately. We can say there's a lot of hype in social media, three times higher activity in the social media. The engagement rate for DeeZee in Poland is number one in Poland. Another collaboration which will happen in the near future, another star. We have other stars that are working with us. This type of activity that will be stronger and stronger. Why we're doing this? To build basically the brand recognition, its economic strength and potential by engaging in collaboration, by enlarging fashion categories, apparel categories. You remember when we purchased it in 2018, the DeeZee brand, basically, the annual revenue was PLN 22 million at a 36% profitability.
Today, DeeZee is being sold through all of the channels in the group and outside of those channels because this is a brand that's recognized in other channels, in other geographies as well. Today, we started from PLN 22 million in revenue. In this brand, in all of our channels, we're generating PLN 250 million, so it's 12 times more than we generated then. The margin, gross margin from the 36% where we started at has grown by nearly 20 percentage points. We can say this works. The fascination with trends and fashion, basically, the product portfolio has fulfilled its requirements of a sustainable development approach. This is something we have in our strategy, GO.25. We're developing our environmental lines of products.
Let me remind you that under our strategy, we took on a commitment that we would achieve certain goals, targets. By 2030, 50% of the income in CCC would come from the sales of products with a sustainable profile. One example is the new Jenny Fairy collection, I CARE WHAT I WEAR. We have recycled products, and we have certified cotton. These products are 100% green. We're proud that we have more and more products of this type in our offering. We are a responsible business, and we're not alone in terms of responsible products. The entire fashion industry is grappling with that. There are a variety of agreements, and we're happy to join them. We share our expert knowledge, our knowledge as well as and our experience.
Maybe not all of you know this, but in this sustainable development, ESG, we certainly are one of the players in the European avant-garde, in fact, and we're happy to share knowledge and ideas and commitments. Participating in global agreements, we mentioned some of them here. This is something that we're gonna continue and perpetuate. We're actually encouraged to do this by you as our investors. We'd like to thank you for those words of encouragement. Customers also support us and endorse this, especially among the younger generation, and this topic is more and more important to them. That's one of the reasons why we're doing this. We believe in it first. Number two, we believe it's equitable, it's the right thing to do. Three, it's also for our customers and our investors. This is more and more important for this to be done.
Before we come to the recap of the overall conference, let me remind you of a few figures, a few numbers which we've discussed a few times. Let me compile them in one sort of bullet points and you'll get a trading update, which will be in our financial statements. We started Q2 very well. This is very clear. We're above our expectations, having in mind all of those problematic elements which affected us in Q1. Sooner or later, that rebound will take place, and we think it. We're confident it's gonna take place, and it's gonna be a bit above our expectations and budget targets. We're growing across our segments. You can see that here in all of our channels. We can say that CCC, so the core of the group, is growing very well.
That omni-channel model, which is based on having good, wonderful relations with customers and having great products. Our sales density figures are above where we were in 2019. Now as we look at Q1, looking year to date, as of, say, May 24, we can say that we're more or less close to the first half of 2018. In the 12-month base, we have a number of challenging months, so we anticipate that the sales density, sales per square meter, is something that could be rebuilt. It won't happen by itself, of course, there's a lot of commitment, and engagement, and wisdom from our teams. We're gonna be able to recover those levels from the best months, best quarters we had in our history, and this is something that's really coming to the forefront. E-commerce is doing really well.
You can see that behind me on the screen, that we have CCC online because of this omni-channel approach, which is fascinating. We've been growing by more than 100%. Modivo. Kryspin Derejczyk talked about this. This is a customer's ideal. He wants to keep us used to that, so it's growing by 120%. This is accelerating quarter-over-quarter. Then we have Modivo, which is enlarging its scope, which is very important in this overall approach, CCC's omni-channel. Then DeeZee is also growing very well. We have a good time for e-commerce in retail. The essence of our business model is that we are an omni-channel approach.
We have these two worlds intersecting with one another the way customers want it, and you know that, and we're trying to reflect the natural purchasing conditions and shopping conditions that we all know. The results, the takeaways are that we have these high growth figures. Even though the base is higher, we have a 35% increase. We have a high percentage of e-commerce, even though brick-and-mortar stores are doing very well. We're working on increasing, of course, that gross margin and our profit. We have a very good product, as Kryspin said. I'm repeating myself. I really want to entrench this message. We have excellent product, a broad, excellent offer to many different target groups, targeted audience. The communication is great. We have wonderful channels of sales, CCC, Modivo, Eobuwie.
Basically, they're overlapping between e-commerce and retail segment, the omni-channel approach. This is supported with great technology. We have a stronger and stronger tech team in Modivo and CCC. That means that despite this environment being demanding, we're not trying to say the world's different from what it is. The world is slightly unfavorable. We anticipate that the margin is a percentage point, as well as rotation or turnover, will continue to improve, and they will in fact speed up. Let's come to the final recap of our conference. The Q1, we're closing up Q1 with a very good 33% increase in top-line revenue, even though the overall business environment's not conducive. It's the second most difficult quarter after the breakout of COVID. We have gross margin improving by 5 percentage points.
We have an ongoing potential to improve. We have wonderful sales growth rate and profitability in Modivo, especially if we compare ourselves to the competition or the peer group. We're also improving the turnover ratio for inventories. CCC is a valuable segment of the group, and it's creating its values by becoming more efficient. Its operational efficiency and excellence are improving. We have a long path to follow, but this is something that will lead to hundreds of millions PLN of capital being released as a result of improving our rotation or turnover. One day, improvement is 5.5 million PLN. We're talking about releasing PLN 100 million, and I can say at the end of May that this path is doing better and better. We're seeing more and more.
The improvement's even better. We have ambitions in CCC in terms of getting to the 200-day watermark, but we assume that we can go beyond our ambitions. In second quarter, we have an improvement of 35%, and we're gonna continue to improve our margins in Q2, and we're doing what we wanna do. We're achieving our targets. We have a clearly defined strategy in the form of GO.25. We have a team that's prepared for each one of our lines of business. We have separate teams. We have clear, dedicated strategies and a path for each one of them, and we're gonna be consistent and steadfast in our execution. Because we're gonna be able to achieve the targets we laid out in GO.25 strategy, and this is something we uphold.
Thank you very much for your attention, and we'll come back after a short advertising break, and then we'll happily field your questions, and I would encourage you to pose additional questions. Thank you very much for your attention. Welcome, ladies and gentlemen. We're gonna go ahead and kick off our Q&A session. Let's go ahead and move on to the first question. If we look at the challenges in logistics, inflation, how will this affect the back-to-school session and the start of the autumn and winter season in 2022 in terms of your revenue and margins? And do you intend to raise prices as a result? Let me emphasize once again. I talked about this in the form of an anecdote during the previous conference a month ago.
I was built and encouraged by the fact that our purchasing team and our logistics team, with the risk flags linked to COVID, Omicron in China, and they came to the management board meeting. They talked about that in January of this year. We had a little bit more time in order to prepare and poise ourselves in terms of the sequencing of purchasing. I don't wanna say, God forbid, that we're some sort of island of happiness, and these challenges don't pertain to us. We just try to prepare and plan with good processes. As we said, with respect to the autumn-winter collection of 2021 or the spring and summer of 2022, we can say the same now. We're gonna be well-prepared. The situation, it's always gonna be a challenge having these type of conditions around us. We have tried and tested modules, transportation.
We're also able to match product ranges, mix and match. Responding to the price question, once again, we can confirm clearly that prices are growing everywhere. Our customers, we as a company, are experiencing that, and that means it has an impact on our costs. That's why we're talking about this attribute, this active promotion policy and first price policy. We also have higher price thresholds like Badura, Quazi, and Gino. We also have price points with lower brands. We might have more accessible products in CCC than the ones they had up until now. It's a little bit more complicated. It's good that it's more complicated because it's truly based on a broad segment of data. We have a really good price and promo team that have really good processes.
Eobuwie, Modivo, and CCC, we have tools that enable us. From the price point of view, we're able to build a chance to grow our margins and at the same time, we address the needs of the customers, which is under the pressure of inflation, and we have macroeconomic difficulties, and this is more difficult than it was in the past. Thank you very much. The next question is whether or not the CCC Group is still operating in Russia. Well, we've been consistent from the second day of Russia's attack against Ukraine. We've been closing and shrinking our operations in Russia. The next day, we stopped deliveries and started closing stores. So this month, we finalized the sale of Russia to an external partner.
We do not conduct operations in Russia. In terms of time period, we can imagine under GO.25, we don't intend to look at that market again. A lot would have to change for Russia to come back onto our radar. We've got great ideas with respect to various lines of business and the markets where we already have a presence, and we wanna concentrate on CEE. Despite the fact that we've closed our operations in Russia, as I said. In Russia, as I've said previously, we can say that our tenets and our targets under the strategy will be delivered. We'll achieve them. In the media, Adam Holewa, Vice President, had talked about the breakeven of HalfPrice this year, this financial year. Does this target incorporate SG&A, or are we only talking about the segment result?
Here, we're talking about the result at the level of the segment, and this is what Adam said when he communicated this information previously. You're reducing the inventories in warehouses, and we have the difficulties with deliveries from China and accessibility of products. How big is this risk, and how are you able to hedge yourself or protect yourself against that? We had a longer-term project in terms of building a trade calendar, a diary, where we were building out the sequences of deliveries of collections. Basically, we're becoming e-equivalent to what's happening on the market. We're improving the turnover of inventory. There are things we can do without any risk to ensure that we're innovative with respect to these deliveries. In this respect, we're quite calm.
We could point out that deliveries from China on average are delayed by two to four weeks, but that was incorporated in our plans. We're changing the calendar. We're gonna have more just-in-time deliveries and supplies, but not so much earlier as was the case in the past. It's gonna be controlled better. This means that we're reducing stock levels in the warehouse in terms of what we need as opposed to what is just not rotating in the warehouse. This is where we're focusing our efforts, and we wanna improve our turnover in the stock levels. You can be calm. We know what we wanna do, and we have a very good team that's dealing with that. In terms of liquidity, the company is balancing on a delicate line.
PLN 2 billion in debt and the free cash flow is PLN -200 million. Why do we have... Where's the PLN 350 million coming from, and what's the idea that we have to address this problem? Let's begin. Is debt big or small? This is a relative term. It depends on what we're comparing it with. We have EBITDA and its value. If we look at Q1, this is historically the softest period, and that was the case in previous years. Q1, as we've mentioned many times, was under the pressure of external factors. If we look at sales, it could have been a better quarter. If we look at our operations, operational business, we've said many times, we've talked about the activities we're taking in order to create the opportunity to continue developing our business.
We've talked about a large number of projects that we're executing. One of the things that we're trying to do to move forward is to improve and streamline internal processes of operational excellence. We talked about optimizing working capital, and this is where we see an area where we can improve. This means that we're gonna be able to continue further investments in HalfPrice or Modivo and to ensure that that development and growth can take place in subsequent periods. Let me add two additional things if you allow me. The first thing, if you look at it this way, PLN 860 million of the PLN 2 billion is equity-like. This is linked to financing. It's share-based for, with respect to Modivo. That means we have PLN 1.3 billion-1.4 billion in debt.
If you think about the EBITDA that we want to achieve this year, we haven't stated it straight out. This is a matter of our ambition. The external circumstances are where they are, but you're capable of calculating things. I think you're able to do that even better than we are. If you compare the EBITDA, target EBITDA this year, the situation by the end of the year will be totally different. That's one issue. The second issue, we are divided financially. Modivo has its financing, then CCC has independent financing. If you look at Modivo, which has enormous potential in terms of its ability to leverage and debt in terms of its needs, it's fully funded in terms of its strategic objectives. We can say it's beyond care.
If you attach that care to CCC, and for the last two years, it was subject to that care, we can say, here we can talk about optimization of working capital. Turnover of stocks. It used to be 300 days. One day is PLN 5.5 million. We wanna drop down to 200 days within a specific time period, and we wanna get there faster than we're pointing out, because we're very keen on doing that. Certainly, the interest rates are pushing us in that direction. If you look at this in this manner, that we at CCC are improving our EBITDA, we're improving our financing profile, and we're bringing in hundreds of millions from the stock to lower debt.
Based on the knowledge we have in our heads and how we're trying to forecast risk, we have that comfort that we continue to finance that operation and develop within this framework, our strategy. We can continue to pursue our strategy. Does the Modivo group, under the fashion advertising services, sell advertising space as well or product placement on the Modivo site or in other, sites owned by Modivo? Well, we're expanding our operations in such a way, like how the best players are doing that. In this area of business, we have a really good team. In responding specifically to the question, yes, we offer these types of services on our website with really good, results. We have nice well-lit spaces in our stores. We're also getting involved in creating content and building campaigns like the Modivo campaign with adidas.
Our cooperation with brands and tightening those relationships, these are things that are happening. What's best, the best is yet to come. Have you seen a positive impulse for sales volume in Poland as a result of more than 1 million refugees coming in from Ukraine after February 24th? If so, which product categories have benefited? Can this migration from Ukraine mean a constant growth for the retail industry? If we look at this picture, so we have another 3.5 million new customers, it's clear this has a major impact, and we're trying to utilize that influence 'cause we give communications also in Ukraine, in stores and in the digital world. At the same time, we're not trying to break it down. These are people who are here. They're our customers.
If they select us, and we're very pleased to see that they choose us, and we're working on that, we have a good product, we have good price thresholds, wonderful communication, and everything that we do as a company for these new customers to select us, to choose us, for sure, this has an impact. Price team is very well aware of that. For us, this is a customer we try to attract to our locations. You mentioned in your presentation the growth rate of sales in Q2 year-to-date at 35% growth year-on-year. Could you say in parallel what is happening with SG&A in the same period? The results we presented today show SG&A growth of 31% year-on-year, but this eliminates non-recurring events. That would be 19%.
Marcin mentioned the initial sales results after the first 25 days of May. This is just the beginning of the quarter. As we mentioned already, our costs are under control. We assume that the growth rate we've observed in Q1 for SG&A, this is something that will be maintained in subsequent quarters. From the point of view of accessible financing sources and having in mind the current level of debt in the company, how do you at the same time intend to finance the CapEx needs you have, as well as the working capital needs you have, and at the same time, pay debt on a timely basis? The fact that you won't have the IPO in Modivo as a result of e-commerce valuations not being very attractive, does that mean you might have to slow down your organic growth in upcoming years?
I talked about this indirectly in the presentation. Maybe let me try to bring some order to this. In terms of the IPO itself, we maintain the plans we have for 2020- 2023, and we've maintained what we said many times. We're concentrating on building from the ground up this operating model in Modivo and Eobuwie that will release that value. The IPO timing will be dependent upon when we can show that value. Coming back to the first part, once again, we're not a homogeneous organization. Eobuwie and Modivo are fully funded in terms of the financing structure. If we look at CCC, once again, I'm going to keep doing this until it hurts. 300 days of inventory turnover. We've improved the turnover ratio by 20 days, and as we reported, it could have been better.
We know how to do this. On average, companies in our industry have a turnover ratio of 130-150 days. The best are between 100 and 130. We know how to do that. One day of turnover ratio, that's PLN 5.5 million in capital. We started at 300 days. We know where the average is. We have a total commitment. We didn't have that previously. We treated that inventory differently, so we have full commitment in the organization. This is an ultra-important goal. We have a clear path defined. We have a wonderful team that's already done that, knows how to do that, and so will deliver on that.
If it's gonna be 150 days, and you multiply that by PLN 5.5 million, and you add that to the CapEx and some other things, and then the result of that multiplication will be the response to the first question. We've been saying the very same thing consistently from the moment we announced the new strategy. Can you tell us exactly what the covenant will look like that will be investigated at the or checked at the end of July 2021 under IFRS, and what did that covenant look like at the end of April this year? We mentioned in our previous meeting that there are banking covenants and how important they are, and we're gonna monitor them, and that's something that's happening in the company.
The covenant we calculate or we're counting at the end of July. This is EBITDA. This is the rolling EBITDA for the last 12 months, and we showed you the results at the end of Q1. Since we have Q2 in front of us, we do not publish externally forecasts of the results which will materialize in the future. The ratio is tracked, it's measured, and we're doing everything to deliver that. The question in terms of the accounting standard, I can tell you the consortium syndicate agreement defines the EBITDA ratio, that it's not comparable with IFRS. There are certain clauses, certain exclusions that we have to apply, but we have this under control. The tax of PLN 30 million that you reported in the footnote, do you have other tax proceedings of additional tax costs?
'Cause this was a tax cost that you mentioned in the note. Let me respond. In terms of all of the important tax fiscal issues, we report them in our financial statements. At this point in time, we don't have any other proceedings, tax proceedings that are pending. In this specific case, the group had already recognized a provision for that. We have several questions about the same topic, so I'm gonna try to bring them together as a composite question. Dariusz Miłek, why hasn't he fulfilled his commitment in terms of purchasing Modivo shares for PLN 100 million? The explanation about banks doesn't seem credible or sensible. If I quote the person posing the question, the banks would prefer to have an additional PLN 100 million in equity as opposed to PLN 28 million. Is it the case that he doesn't believe in it to invest his funds?
I like these questions, especially we see many chats. In terms of whether or not something's credible and sensible perception in this question, I'm not going to assess. Well, maybe indirectly, but I can tell you directly and thinking about the sensibility, the banks have a certain level of dilution where from their perspective, and this has been recorded, as something being insufficient. The 23 million was the borderline value that was possible. Other elements. Well, because of the syndicate agreement, Dariusz Miłek wasn't able to do everything. There was the valuation point at which you could enter the company as a shareholder. This was fulfilled. If the perception is different, then you'll have to assess that on your own as the person posing the question, but that was what was possible. Thank you very much.
If you could give us some more color about the meeting of bondholders? Is this just a minor correction in terms of Russian assets, or is there something else on top of that? Yesterday, we gave a current report about calling a meeting of bondholders. This is a technical correction because the company has retracted or withdrawn from the Russian market. We had a surety for the Russian company, and so we have to be released from those sureties. This has been discussed with the banks, and so everything has been agreed. Now we have to inform the bondholders so there's no additional complications related to that topic. In terms of the provision for write-downs in Russia, we described that in detail in our financial statements. This will end the subject, the Russian topic.
If you could give us a commentary about the debt structure and the increase of debt service. Are you thinking about financing under fixed interest rates for loans or bonds? Let me tell you, we actively analyze the situation on the market, and we've had several increases, hikes of interest rates. Our current structure is based on a floating rate, but the market is quite distinct. We talked about how we look for financing our projects internally, and that's the essence of the matter for the upcoming months. We're going to scrutinize the financing market and the financial market in terms of the IPO of Modivo as well. The longer time horizon, we're gonna consider other instruments as well.
If we were to go back to our GO.25 strategy, we mentioned green bonds, euro bonds, but we have to have a good climate for that to transpire on the market. We're monitoring, but we'll have to come back to that later. When does the group anticipate that it will pay out dividends from the profits from 2019? The group is at a certain phase, especially with respect to CCC and HalfPrice, where we have a specific path for building the business of HalfPrice. We believe in that very strongly. At the same time, and we've mentioned that, we feel the need. We want to deleverage the company through switching the way of how a company's being financed and reducing the inventory stock levels.
Once those factors are handled, this would be a good moment in time to return to the subject of the dividend. Today, to be clear, we're focused on growth and deleveraging the company. That's the priority. According to the preliminary data, we had a loss of PLN 45 million and according to the reported data, it was PLN 56.5 million. What's the difference coming from? Should we anticipate that there will be such differences in subsequent results? Ladies and gentlemen, the preliminary result is published on the first day of the new month. The entire finance team stands on its head in order to have the estimate, preliminary estimate being as close as possible to what we have when we close the month.
If we look specifically at that, the PLN 45 million we published in the prelims, let's remember that we were talking about continued operations. We hadn't considered yet the exclusion of Russia. If we look at the results we published in the financial statements, with respect to continued business is PLN 56 million. We have discontinued business of PLN 4.5 million. I would say that we're around PLN 52 million, so we're very close to where we were with prelims. If we think about the PLN 52 million, we also have a write-down of the Russian business of PLN 6.4 million. In total, we can say without that write-down, we were more or less where we were with the prelims. I think the team did its best and did well in terms of what we can anticipate from that team.
Do you see room for improving gross margins this year? What is the realistic range? I recently heard from somebody who has a lot of experience in trade that when you improve gross margins and at the same time you improve turnover, this means you have strong products. We really believe in the strength of our brands and our products, and you can hear that from us. We think there is that headroom to improve gross margin and turnover ratio of our products. We wanna be common sense. We wanna show our common sense guidance. We talked about 52%-54% for the full year. You can see that we are conservative in our approach. At the same time, we see the quality of the product. We see how things are fleshing out.
We see the breadth of the offering, the quality of the processes that are defining the depth of the product range we're purchasing and how things are developing. We believe that there is headroom for us to improve our gross margin, but we'd prefer to surprise you positively as opposed to make upfront declarations. In terms of what the realistic scope might be of this improvement, I won't be able to say straight out, but we do see that potential. Once the environment enables us to benefit from that, then we'll be able to report such improvement. Thank you very much, ladies and gentlemen. That was the final question we had in the Q&A session. We'd invite you to the next conference, which will take place in October. In the meantime, we as a team in the investor relations team will be at your disposal.
We'll invite you to be in contact with us. Thank you very much to the speakers. Thank you very much. Have a nice day. Goodbye.