LPP S.A. — Call Transcript 2025

Szyborowska, welcome everybody wholeheartedly to the Results Confirmation Presentation Conference. Marcin Bójko, Deputy Chair of the Board and Chief Financial Officer of the Group, and Magdalena Kopaczewska, Director for Investor Relations, are going to be your hosts today. Ladies and gentlemen, our meeting today is going to be devoted to summing up the results of the LPP Group for the third quarter of the current year. In our case, that means August, September, and October. And it is what we will start with. Throughout the conference, we will also tell you about our plans for the nearest future and more long-distance plans, and we will complete the meeting with a Q&A session. You have a chat box at your disposal. You can see that chat box on your screen. It is going to stay active and is of use to you should you want to pose a question. If you still have any questions to clarify after the meeting has come to an end, please get in touch with our Investors' Relations Department, [email protected], and the media are invited to contact [email protected]. Our meeting today will last more or less an hour, so we will try to wrap everything up by 7:00 P.M. and stick to this time framework. Let's move on to summing up the results, financial results for the third quarter of the present year. Yes, without further delay, since we have a lot of material to cover, let us move on to summing up Q3 2025, the most important pieces of information: like-for-like stores, that is, those that have been in our network over 12 months, 4.3% of growth in like-for-likes. In a moment, we will see the details, but it is a very nice result. The stores that have been with us for a long time are not the only part of our business. We've been growing systemically. You've noticed that maybe recently that 232 stores opened, including 200 in Sinsay brand, but we also keep on growing in the other pillar of ours, that is, e-commerce sales. So PLN 1.7 billion in sales increased by 22% year on year in constant currencies. So great dynamics. And what always comes as a good piece of knowledge is the payment of the second tranche of the dividends: PLN 330 per share, so over PLN 1.2 billion paid dividends. Recently, the percentage of the dividend is around 4%. These are our plans. So this piece of information is always a very positive one that we eagerly share with you. These are our operational results. As for financial results, here we have four main indicators: sales in the first third quarter, PLN 6.1 billion, 22% dynamics, EBITDA PLN 1.7 billion, EBIT PLN 1.2 billion, and net profit PLN 800 million. Big, nice numbers in Q3. They are really lifting our spirits when we look at the comparison. EBITDA is 48% of growth year on year, EBIT 61%, and net profit 39% of growth year on year, so increases over the dynamics of sales, which of course means greater profitability, as we will see in greater detail on the slides to come. The business results that you've seen on the previous slide nicely translate also onto the financial results, and to begin with, maybe there is one more important disclaimer to share. The results that we've been looking at in terms of profit are those that have been adjusted, which means that there are purely business-like results. Everybody that is with us here today, go over our cyclical reports two weeks ago. We published one. The decision of the board, having analyzed the market situation, was to write off around PLN 800 million from the result. And the write-off result is from the situation of the Russian campaign of the Russian investor, who in 2022 took over the business after this investment. And we informed you about that in September. We talked about it in extenso, but the situation is dynamic enough to new information that we described in the current report. We had to reevaluate the situation, and that is what it led to in terms of business decisions. Just to remind you, the write-off is a non-cash one, so it does not mean any cash outflows from the company. The situation of the company is really comfortable, and I believe that this is something that is reflected in the results we are presenting today. We have enough resources to develop, to invest, including into logistic-related Capex. And as we have commented, that is also, of course, stemmed from the current analysis of the situation, but we see no reasons to change anything in the dividend policy either. We simply keep on focusing on pure business, and the results that you see presented in this slide and in the slides to come focus purely on business. 2025 is also an acceleration of our growth, and traditionally, we show you the status: 232 stores open in Q3, nearly two-fold acceleration, over 30, 32 stores in LTMH, so Reserved Cropp House Mohito, and the third quarter and over 2,000 in Sinsay. The third quarter, we complete with a network that altogether has nearly 3,500 stores. Now, moving on to the details of financial results, we are going to look at particular indices in greater detail: the comparable sales, like-for-likes. This is what we started at the beginning with: the 4.3% generated over the last quarter. In a broader context, 7.5% in the third quarter of the last year. The basis was high in the period that you can see presented in the slide. That was the highest one. The base was demanding. That is why we talk about 4.3% as something positive and something that we are actually happy about. Now, let's take the results and comparable like-for-likes, and we add new sales. Then we can see that in the third quarter, the increase in sales reached 22%, 22% offline, and nearly 21% in e-commerce. But after the nine months, the entire business growth by 20%. An additional piece of information is that there is an increase of foreign exchange rates that was minus 1.5%. So if we purify the results by that macro impact, that would be higher by 1.5 percentage points. That's our first leverage. The other one is gross profit margin. After the last Q&A session that we had in September, during that session, we signaled that there is the mathematically logical potential for increasing the margin because the second half of the year is clearly better. We've contracted the collection at a more favorable exchange rate, and back then, we could already signal that. Now, I'm happy that nothing went wrong, and we can see that everything went according to our plan, and we can report nice high margin. And again, as was the case with like-for-likes on the scale that you can see here, the highest margin in the last period is to be seen. The zloty was very strong in recent years, and that's something that is also favorable. So sales, gross margin in the third leverage, that is, as G&A costs. And in this context, where we are most happy about this particular leverage, everything is in our hands. At the end of last year, we commented that we are building this scale. The cost, the dynamics, they were higher. Some of the locations, logistical locations, only opened themselves, and they only learned how to be efficient. But starting with Q1 this year, the costs behave the way we wish them to. We are efficient in the so-called back office. We have mastered the development rules there. We know that the teams that we have are sufficiently efficient, and we can grow with them, but two greatest leverages standing behind the drop of cost is, of course, logistics and marketing. Apart from the offline stores, when we think about the broadly understood logistics, this is the biggest group, and owing to our investments in this area, we can optimize the cost, and the other part is performance marketing, and here, giving you precise digits, we spent not even 8% in relation to the profit from the e-commerce channel compared to 9% last year, so this one percentage point is quite a leverage, and all in all, when we put these three components together, what we get is a really nice dynamic in profits growth. We saw nice numbers at the beginning. We are very happy about those growths because probably at this point last year, there was a lot of uncertainty. Of course, we believe in our strategy. It is well thought over, and now we are bearing fruit of the hard work that we carried out over the last months. The increase in profitability of around 5% at the EBITDA or EBIT level, these are really great results. In the third quarter, in terms of net profit, it is around 2.5, but again, giving you a broader context, this year, we've accelerated with investments quite much. We used the existing banking limits that we have quite extensively. But it, again, as informed towards the end of November, a big success of the entire organization and of the team involved in the project made it possible for us to close the complex refinancing structure for our debt so we can enjoy financial stability for the next three-five years, depending on the area of financing. And ever since then, so ever since Q4 in consecutive periods, those financial costs are going to be even more optimized. So everything is heading in a really nice direction. And the nine months, with each quarter, we were kept accelerating, also showed that when you look at the dynamics, on average, plus minus 30% of increase at any level, reminding you that sales after nine months grew by 20%. Then automatically, that translates into the increases in profitability at any level. Now we can smoothly go to the operational indices, inventory. The image is really great. The last bar that you can see is below the second quarter, particularly the line that shows you the value of our inventory per square meter. It dropped quite significantly here during the first half of the year, we entered the first half with higher inventory levels. You might remember that in June, we reduced our guidance. With this stock, we've been working pretty actively. What was supposed to delay was delayed in terms of supplies, and then we lowered the purchase budgets for consecutive periods in order to make some space for this inventory, so this is the result that we got to. We still have some more goods coming before the end of the year, but I don't think that we will get anywhere near 2,000. I remember what I said in September when we commented on behalf of the company. Still, in the first quarter, maybe in the first half, we'll be working in this inventory that we are shifting from those periods. You can see, especially in the Sinsay brand, this margin was under slight pressure. But we can see, looking at Q3, that in terms of business challenge, we can really generate nice results. Inventories, of course, are related to the working capital. This is a quite boring slide. We've been able for some time now to generate the negative level. And new financing gives us additionally more comfort in terms of reverse factoring investment. So yet another area, as Warren Buffett said, banking should be like that. And we are happy to have this boring comfort, so to speak. Now, in terms of logistics, it is marked by high CapEx. Our CapEx is foreseeable. The blue bar is looking from bottom up. These are expenditures for stores, so just to remind you, EUR 450 per square meter in the Sinsay brand and EUR 800 in other brands is the average. And in terms of logistics, this is the median bar. This is the area that we sped up on already last year, over a billion spent this year, but we will see on the slides that still next year we'll be spending. We are spending a lot, but less than this year is going to be spent. But as we saw in the OPEX part, these are high-quality investments, and they really allow us to generate nice savings, this operational lever. And what makes us happy is that our growth is dynamic and fast, but all that is carried out with safe debt level. The first and second quarter, slightly high, but then 1.3 debt to EBITDA that was really comfortable. Now it's 1.1, so the situation is really safe. And I guess that the commentary, well, is not really necessary here. So that was the summary of the third quarter and the nine months, but it is December already, so in Q4. We can now observe what is happening on the market. So over to Magdalena. Thank you. Before we move on to our plans and goals for 2025 and 2026, a few words about the fourth quarter. In November, we have Black Friday and Black Week, so we can say this is the season for discounts in stores. Today, it's not that clients are not that enthusiastic, but the spending these days is much higher than on weekends before and after the Black Week. We started on the 26th of November, so on Wednesday, and that ended on the 1st of December, so during Cyber Monday. In conclusion, we can say that we are very happy about the Black Week and this season. 32% in omnichannel. This is the increase. 40% online and 25% offline. Looking at the fourth quarter, from the 1st November to 9th December, we can say that the fourth quarter began a bit below our expectations, but from the second weekend in Poland, the sales improved. Most probably, this was affected by strong October where most of the clients did their shopping over there as for the autumn apparel, and then the clients are waiting for the Christmas season, so this is presented here in the slide. When we look at the fourth quarter, we look at it positively because the trade in December might be supported by the calendar-related effect. Christmas Eve is going to be a day off. We also have working Sundays, and the data shows that the average Sunday, these are higher sales than on a Christmas Eve. In conclusion, regarding the fourth quarter, I would like to say that we plan to open 350-400 new stores of all our brands, the majority related to Sinsay. And now we can move on to detailed plans as for 2025 and 2026. Thank you. When we look at nine months of very good nine months, and we add on top of that the prospects rather optimistic presented by Magdalena, we can see improving dynamics. We can confirm what we signaled in Q&A in September. So the market situation and the results that we saw at that time were delivered in the third quarter. So we have now a few weeks of this year, and we can improve our guidance. So the new expectations for this year, at least EUR 23 billion of sales in both channels, 20% increase in online and offline. It does not change compared to the previous information. Significantly increased gross profit margin from 54%-55%. OPEX related to sales, so 40.5%-41%. That is the S and G&A of sales. So whether this is EBITDA or net profit, naturally, this is increasing compared to our expectations. Capex, a small reduction. This is more cash that stays with the company. This results only from a smaller number of stores open and net debt, rather comfortable 1.1. So such updated guidance for 2025 is our new grounds for our goals, for our targets for 2026. The financial year is going to be reported in the second half of March, but we want to provide you the knowledge during this meeting. So here we have 2025 in the first column, so the higher forecast for this year. And from that, we move on to 2026. What do we expect? At least €28 billion of sales, over 20%, maybe €25 in offline even as for the increase in 2026. After the third and fourth quarter, we can see that the gross profit margin is dropping a bit. This results from the natural participation of Sinsay. We know that this profit margin is a bit lower. With more development, it's going to be more diluted. As for SG&A of sales and CapEx, give us still room to generate this positive result, so around 40, 41. And when we see the EBITDA, similar results as this year. And 22, 23, this is the EBITDA margin. CapEx a bit smaller compared to this year. This results from lower spending on logistics. This year, we had an accumulation in 2026. We are going to spend for robotization, and this is only one investment, one warehouse in Brześć. Net debt and the floor space increase comparable, so nothing is happening. This is really very positive, boring situation. So that was the conclusion. As for the nine months from spring, we have this three-year strategy, a short-term strategy in our company. We provide reports and we provide where we are up to 2027. So after this strong acceleration, we have some observations. We continue with our strategy, but some things needed to be adjusted. So the direction does not change. So this is our direction. Sinsay is the growth engine for LPP. The development is going to involve opening of new stores in smaller towns, maybe not so many locations here in heritage brands with brands that have significant ambitious goals, single-digit like-for-likes to cover the inflation. Of course, the top target growth with focus on profitability. In June, we showed you the update of the information. Why Sinsay is this drive engine, why we focus on Sinsay, why this is working. We can see that after nine months of results, when we look at operational details and financial details, the offline store, 30% of EBITDA here. We know that we have some challenges as for managing the stock. So even with standard issue here, we can generate a significant EBITDA. Historically speaking, whether this is 24 or 25, you can see the share of profitable stores, this is much better. When we add more details on the left, you can see a graph, profitability per store size. So the mini, these are the smaller ones. You remember in June, this format was stopped for a moment. So the tests are happening. We have first conclusions. It is very promising, but we want to make sure that when we go back to this plan, these stores are going to be profitable and we will have good know-how how to do that, what is happening, what is the offer for the customers. So until we have certainty, we freeze this idea. We can see that other store size are very profitable and the biggest ones even much, much better. This translates into a very good payback period, 16 months. This is one month lower than before. When we compare the year with significant challenges in Eastern Europe, 12 or 13 months, this is a good result. We are very happy about where we are with Sinsay going into the future. I believe that from your perspective, a good important information. The updated plan for the launch of new stores. We planned 1,000. We can see that the fourth quarter is going to be the more intense. Some are going to be shifted to the next year. In some regions, we observed a certain slowdown in Slovakia, in Czechia, and Hungary. These are the regions we don't see a significant interest in such stores on the market. These regions are rather cautious in their approach. We stop for a moment. The mini format, as I mentioned, until we have hard data and conclusions and certainty, we don't do that. We have a significant group. We have information coming to us. So when we have certainty, we will go back to that very quickly, but we need to be sure. And in eastern Ukraine, we had a significant challenge related to the quality of data. So we entered 15,000, 20,000 towns, and then it turned out that this town was much, much smaller. So we decided that we are not going to enter towns below around 30,000. So when we take all these elements into consideration, it means that we take care of the profitability and the updated forecast for the future results from that. So we focus on a higher margin. And in 2026 and 2027, we can see the potential for slow, gradual acceleration. The development of offline, not only Sinsay, but our heritage brands, they also are ambitious in like-for-likes. E-commerce, we also want to have 20-20% plus as for growth. We have significant leverage. New markets, Central Asia, our mobile app, this is also working very well, 80% in online through an app in Sinsay. We broaden our offer in non-garment segment. In the following months, this is going to be a very intensive work for us as for optimization of our offer. We can see that the sales is good. We still need to work on the margin, but we had a lot of the tasks, and we are going to move on into these aspects. That is all regarding sales. The allocation of capital again, a positive note, going bottom up, PLN 1.6 billion, simple number of openings, times CapEx envisaged, and the main one, these are the expenditure on logistics. We could see that leverage in this area is particularly clear and visible. There's a clear return on investment. So next year, PLN 700 million, and we are continuing robotization in main locations and completing one center in Brześć in terms of a building, and 2027 will be the continuation of equipping warehouses and adding robotic solutions. We are still thinking about one more location in terms of e-commerce, but this is still under the analysis of PLN 500 million. In two years' time, this is the upper number that we are to expect. Now, if we sum it all up, then 2027, that is the last year that we are running to another three-year perspective, we are reducing top line a bit, so this growth in terms of revenue, so minimum PLN 33 billion in 2027, 1.7, that's the growth factor versus 2024. Now, two consecutive lines, so gross margin and OPEX, we are improving the quality here clearly, and we see that this operational leverage is working. Increase of EBITDA is at the level of 1.8 versus 2024. So that's an improvement in profitability, between 21.5% and 22.5%. So systematic growth of revenue, this is what we expect. And of course, that also means that we need to think about increasing dividends equally. We are a dividend company, as I mentioned, and it has been the case for some years now. The dividend yield is on the rise, and we do not have any reason to modify this trajectory. And I believe that, well, we started with this positive tone, and I guess we can end also on a similar note. So great results after nine months, updated strategy, but we are remaining on the same trajectory. We know where we are heading. We simply are approaching it in a slightly different way. The prospects of growth and dividend sharing with our stakeholders, of course, does not change. So I guess we can swiftly move on to our Q&A session now. Let us start then. Question number one concerns insurance related to the fire in Romania. And there is a request to define insurance liabilities. What value do we have here in the balance sheet? How much was already given by the insurer? And in which quarter was it put into the books? Well, the main numbers and the main events in the second quarter, PLN 351 million of the write-off was the loss that we suffered concerning our assets and goods because we rented out the building itself, but the equipment was ours. We also had the auditor made it possible for us to book it. That was the second quarter. Now, the current update, around two weeks ago, we got an advance payment that was precisely PLN 20 million. Yesterday or the day before yesterday, that's the latest piece of information. We got informed that further PLN 200 million would get into our account owing to this loss concerning the liquidation, the financial part of it. We need to understand that from the formal side, these are thousands and thousands of documents that we need to deliver, but our accountants' teams work on that regularly, and we can see that it is heading in the right direction. These are the amounts that are going to be booked in Q4, and we keep on working systematically on that. Further amounts will be getting to our account. The other part, business interruption insurance, so the loss of margin and additional operational costs. This period expires after nine months, so it will be only in spring, at the end of March, when we will start summing it up and talk about the payments, so no earlier than probably in Q2, Q3, that we can expect any income from that side. Now, inventory quarter to quarter dropped by over PLN 400 million. Could you explain that? Well, yes. As I've mentioned, we simply had too much in terms of goods. And once again, 1,500 stores, the initial plan, we'll see that we'll open 910, talking about Sinsay. So we entered it with a great stock. So this drop after the first quarter, when the LFLs was positive, we would still be testing what the reason was. We didn't put the brake to hold so much. But then, as we saw months passing, it became clear that we need to do something about it. And the results offered themselves in quarter three. So there is no mysterious knowledge. It is simply hard work of our teams here, those that deliver their goods and our designers. Assess 26. So the spring and summer season that we are entering slowly will have a greater share of the goods that were ordered beforehand. But we can see that in the first half of the year, we will get it over and done with. That's just a standard business challenge that we are managing as we go. Still on the inventories and the stocks, it's about the optimum level of inventories for another year. So what would be the level we would like to keep it at? Between 1,700 PLN and 1,800 PLN per sq m. Can you see any chance to increase, improve LFL in Sinsay? What would contribute to that? It is a very good question and again, a broader context. When we look at a slide from our presentation with like-for-likes, we will see that, of course, our appetites were greater, but it is the market. Our teams do their utmost, and we always offer the best possible collections. The client voted with their decisions. We have our conclusions. We are entering the autumn season with our homework done and lessons learned. 2023 was another period when we had a lot of inventories and the margins were what they were. The like-for-likes were what they were. Reserved is a different brand. The first half of the year was actually in the same situation, minus 5% on likes in the first quarter and similarly in the second. We know how to do our homework. But number-wise, I would call for looking at 2024 and Sinsay, what quarterly dynamics we had, 11, even 12% in like-for-likes. So quite naturally, this is something that is nearing the average, and this biannual approach is not as pessimistic as this readout for the last quarter might suggest. Let me maybe add on the structure of likes for Sinsay. The women collections have very good likes, and a different group has lower likes. There are questions concerning competitors and whether women collection in Sinsay has poor likes. Well, that's not the case. And since we talk about competitors, how do you evaluate the risk of aggressive strategy of Chinese platforms and their impact on LPP business? And how are you going to compete against these Chinese platforms? I believe that our business model is the best response and reply to that competition. We are present in two channels, offline and online. The client always has a choice to come and see, and they do not need to buy something they've never seen. So we bet on quality. We bet on safety, our application, and security. When we look at our application in the second but last quarter, our application was the top one in terms of the fashion category. Then it was in top two. So those results are improving. We can see that the app is appreciated by the customers. We offer good and fast, quickly delivered collections. So we can say that this is the reply to the competitors. And talking about the cost, this is the third biggest LPP cost, that is performance marketing. That's advertising online. We spend ever less year on year. Versus the internal budget that we've planned, we spend even less. So we have quite a reserve here and a lot of tools to sustain this competitive spirit. We always observe our competitors humbly. We treat it as something that makes us perform better. We can see that we have efficient tools that enable us to compete even now. What do you expect when we talk about refinancing and savings? And I can see that the margins, given our scale and this oversubscription that we've commented over 50%, the margins are much better than they were. And versus even monitoring, say, the current reports of other players in the Polish market, those margins are attractive. In terms of a precise estimate of what kind of saving it is, we will leave it to ourselves because, well, the consumption of it will simply be different. There are no two completely comparable years. We can see that the Sinsay model is working, and there are the flows as we expect. And what's most important is that in this new structure, we have this comfort of three years of current limits that we can flexibly prolong and CapEx that is financing of investment. That's the prospect of five years to come. That gives us a lot of comfort that in our strategy, we can focus on the development of our business. We are safe in terms of our assets. We can pay our dividends. And 21 financial institutions are interested. So that shows that the broadly understood financial market also believes in our model because these amounts and time, they show the scale of this commitment and hope in the development of us as the LPP Group. How about the current situation in the German, U.K., and Ukrainian markets? German and UK markets enjoy a very sound situation, to put it briefly. The likes are improving. That's obvious. Starting from 2023 autumn, in the UK, we added new stores. I'm talking about the Reserved brand in Great Britain, in the UK. They've been on the rise. EBIT is not positive there yet, but every quarter, every season is ever better. And starting from the beginning of the year, the likes are double-digit. Similar is the case in Germany. It's a great e-com market as well. When a new Reserved store was open in Oberhausen, we have 18 stores there altogether. I'm looking for confirmation, yes. So there are 18 stores there, and it's just the Reserved brand. In e-commerce, of course, we offer other brands as well. Again, high increases. Post-COVID, we negotiated favorable conditions. So last year, the German company celebrated their 10th anniversary, and we are very happy that last year they proved to double-digit profitability, and it sticks to it. And the third country asked about was Ukraine, right? Yes. And it nicely relates to the question about likes because those who have been with us and follow our detailed data, again, I encourage you to keep a close eye on our investor relations website. Anyhow, we keep developing the Ukrainian market, so it weighs a lot, particularly in Sinsay. And we're talking about sort of normalization year on year, so very high likes last year and now natural drop. So Ukraine is the biggest market with this normalization is really high. After the war, there came a drop. Then was the bounce that was very high, 40%-50%. Now we have a double-digit minus there. So again, that's only natural. But when we look at the profitability, the Eastern markets are still the most profitable markets in the group. That is why we systematically keep investing there. I mentioned the number of openings. We look at the profitability. We keep on learning. That was the first year of the acceleration of our growth, but we draw conclusions as we go. June showed that we are not afraid to stop or to take a step backwards in order to take two steps ahead after. We are focusing on profitability. That's a natural process, so that's what it is like. For some time, we can observe negative LFL regarding Sinsay. What is the diagnosis, in your opinion, in this situation? And what activities do you plan to improve the situation? I believe a similar situation was already asked. So natural like-for-likes, natural grounds. We start from figures. But of course, the appetite is much, much higher. We learn from the past. New project, new season, new hope. So we can do the best work, but the client is going to actually come to the store and buy. So we discuss that good like-for-likes are grounds for the new motivation program for our teams, but I don't think they need additional motivation. We want to provide best collections for our clients. So natural motivation is the main factor. This is what we believe we can do, and the history shows we can. Expansion, Uzbekistan, Kazakhstan, these are new markets with new stores you launched over there. Do you plan to open in new stores around Central Asia or perhaps other markets are also the topic? Central Asia, yes. We opened almost all markets. In Moldova, we are also there. Sorry, the end of the year is very intensive as for the financial aspect. So this was our debut in Moldova. This year was a record year as for the opening of stores in new markets. So as for the launch, this is all now we are building the scale in particular markets. So we do not plan to launch new stores and enter new markets. So this slowdown regarding Czechia and Slovakia focuses our attention on the new markets. So we are going to look for the potential. So 950 Sinsay stores is going to be delivered. In the fourth quarter, what impact do we have from higher winter temperatures on the sales? We are looking at the calendar. We want to be fair and very transparent. So we are the last to look for excuses as for the temperature. I remember two times during my term of office when September was really difficult because the temperatures were really high, and the demand shifted into October. That was 2024 and 2023. In May this year, it was the coldest May ever, so the first week of June was really difficult. And yes, these were the objective reasons for that. Now, higher temperatures. Yes, as Magda presented, the dynamics are improving. That was a long weekend. The clients were probably waiting for the Black Week. So this is our diagnosis. So the trend is improving. Like-for-likes from negative are going to positive numbers from October, November to December. So let's not talk about temperatures now. We have still working Sundays, Christmas time, and New Year's Eve. So let's wait for the final results. What are the plans regarding the marketplace? We've been analyzing all options regarding e-commerce. The app is working really well. Many clients are drawn by the Sinsay app. So this is 30% of business with e-commerce. So this is a really strong instrument, and this marketplace is a natural step. But I believe that this is too early now to talk about it. We are going to analyze that. So once we have precise information, we will go back during our regular quarterly meetings. The marketing level, what was the marketing level regarding the guidelines for 2029 and 2026? That was 9%. When we look at guidance 2026, 2027, you believe operational effectiveness is going to improve. In what areas do you plan the improvement and whether this is the result of opening new stores? A very good question. With a partial answer, yes. This is affected by a larger percentage of Sinsay. So the gross margin is going to drop, but Sinsay is lower. As for the CapEx, it's not that expensive as other markets. It's improving our leverage. But the area where we can see positive impact looking at the next two years, this is logistics. So more investment we can see after this sample in Bydgoszcz, our biggest e-commerce warehouse, 100,000 square meters. It is working perfectly on the largest scale. So the cost regarding logistics, this is the second group of our cost. So that was a really small change that is generating a significant potential. So what is behind that? Can you tell what was the guidance for 2026 regarding the level of sales within the whole group, but also regarding the Sinsay brand? We have ambitious targets, but in our model, these are single-digit or lower amounts within single-digit figures. You decided not to enter towns smaller than 30,000 inhabitants. Do you believe this is related to the Polish market? No. That was a comment regarding Ukraine from the logical point of view. So the data for smaller towns, well, the situation regarding the war is difficult. We have doubtful quality regarding the data. So if we have a lower number of citizens in smaller towns, so we want to develop, but we want to be also profitable. So this is our cautious approach to that. On a long-term basis, when we look at the logic, so do we want the company to grow 20% year-over-year? So don't we expect positive results from this operational leverage? Or perhaps Sinsay is less profitable than other brands. So maybe this is a side effect of this development. Well, here, this is also a good question. We have our internal targets. We also have guidance. So this year taught us a lot. We are more humble. So that was a really safe level that we can deliver. Internally, our appetite is much larger, of course. This leverage is at the level of one, so close to EBIT, so zero plus, we would say. But we believe that it's going to be there. So we have these brackets we want to operate in. So the top or low level of the margin. We believe that with such approach, this margin will be noticeable, more noticeable. So within a two-year perspective, we are going to report that on a regular basis. So you will then be able to update with more recent information. Are you planning to have more write-offs regarding the Russian business? No. This PLN 800 million in the backup, we also have information regarding that. So this is the total write-off. As a company, we are going to fight with the board as well. We are in close contact. We are going to fight back. But for now, to make it easier for us for a discussion, we want to focus on business these days. So we don't want to go back to it every quarter. So this is a total write-off. What happens later on, that would be a plus result. So we just wanted to address this topic and talk about LFLs, improvement, growth, investments, and new markets. What markets, in your opinion, are the weakest after the third and fourth quarter? I would like to repeat what I said before. Czechia, Slovakia, and Hungary, and Ukraine as well. We can assess that from the perspective of like-for-likes with least dynamics. Ukraine, of course, when the rates and the bombing is increasing, then we also have drops in the sales. Estonia, it's a small market. I also mentioned that before. We can see that in like-for-likes. The governmental priority is to focus on the fiscal approach and the taxation. This result, this is the situation. What about any potential attacks on your sites in Ukraine? We cannot predict that. We know the operational side. As for our stock, we don't have just one good location. We keep our stock in different locations. So we have a diversity in our approach. This is what we've changed after recent events. Does the financing make it possible for takeovers? Or maybe you are planning to approach that differently? Refinancing allows us to do much more. But for now, as for allocation of the capital, when we refer to CapEx, these are investment, expenditure, logistics, Sinsay, new stores, and dividend paid to our shareholders. We don't have such M&A ideas. We can see that in 2025, we have a lot of data. We need to be flexible in our reaction. So we need to do business. Maybe another comment. We also have such topics or such offers regarding M&A. But as LPP, we are generating bigger profits over weekends. So this is not like the scale we would like to look for. We focus on our organic growth. Another two questions refer to the prospects regarding Europe or Great Britain. Do you believe that Sinsay expansion over this market is possible? Or do you plan a significant growth, better growth of Reserved brand in these markets? As for the first question, Sinsay in the West? No. Not that we close our options for us, but we want to focus on the quality. We observe the market. We can see the history as Marek, our CEO, is looking. We draw conclusions. Other companies went there, did wrong, and had to close business and went bankrupt. So the Sinsay model is designed to be effective regarding OPEX in the West. It's difficult to look for such cost-related effectiveness so that the workforce and lower Capex. So we focus on Central Europe, Eastern Europe, Central Asia, Southern Europe. This is what we presented in the slides. So these are the regions that we really focus on with our activities. We can see that we have really good returns on investments, 12, 13, 16 months. So below our benchmark, much, much faster. And this is what we focus on. So Sinsay and Western Europe, this is not the direction that we want to follow these days. As for Reserved, another brand commenting much wider, as I said, with the strategy, with larger space, Reserved needs at least 16,000, 1,600 meters. It's difficult to find in Western Europe, referring to question regarding Germany or U.K. So in U.K., we needed 10 years for this profitability. In Germany, we are still working on it. So when there is a situation favorable for investment, we are going to go for it. But when we have a good location, we are going to consider that. So like the new opening in Oberhausen, this proves that. But whether this is the scale, well, right now, we don't see this potential regarding the size of the stores. We focus on the growth of Reserved, basically in online. We can see a significant potential. What is the payback period from investment in robotization? Up to two years, and the last question, we answered that, but we want whether this write-off from Russia is going to affect the payment of the dividend. A very good question. Yes, we started with the dividend, so I believe this is the last question regarding Q&A, so we are going to complete with dividend as well. No, it is not going to affect the dividend. As we communicated, we have resources, but the board recommendation and the resolution is going to be adopted for the future, but business-wise, the write-off was a non-cash write-off, so the reported profit was just adjusted by this write-off. You can go back to the backup, and clear net profit is going to be grounds for the payment of dividends. The dividend was on 70% of net profit. Nothing changes here. So this is the level. We have resources. We have a really comfortable situation. 1.1 leverage, a very good level. So to reiterate about it, no, it is not going to affect the dividend payout, sharing the profits with you. After nine months, this prospect is really good. I'll close on this optimistic note that we are closing our meeting. Since this is the last conference this year, on behalf of the entire LPP Group, we would like to wish you first and foremost a very healthy, jolly Merry Christmas. May this season be the period of relief from everyday struggles. And for next year, we wish you all the best and making your dreams and targets come true, both in your private and business lives. Thank you very much for today. And see you at another result conference that we are planning for spring. Thank you very much. Goodbye.

Speaker 1: Szyborowska, welcome everybody wholeheartedly to the Results Confirmation Presentation Conference. Marcin Bójko, Deputy Chair of the Board and Chief Financial Officer of the Group, and Magdalena Kopaczewska, Director for Investor Relations, are going to be your hosts today. Ladies and gentlemen, our meeting today is going to be devoted to summing up the results of the LPP Group for the third quarter of the current year. In our case, that means August, September, and October. And it is what we will start with. Throughout the conference, we will also tell you about our plans for the nearest future and more long-distance plans, and we will complete the meeting with a Q&A session. You have a chat box at your disposal. You can see that chat box on your screen. It is going to stay active and is of use to you should you want to pose a question. Szyborowska, welcome everybody wholeheartedly to the Results Confirmation Presentation Conference. szyborowska welcome everybody wholeheartedly to the results confirmation presentation conference Marcin Bójko, Deputy Chair of the Board and Chief Financial Officer of the Group, and Magdalena Kopaczewska, Director for Investor Relations, are going to be your hosts today. marcin bójko deputy chair of the board and chief financial officer of the group and magdalena kopaczewska director for investor relations are going to be your hosts today Ladies and gentlemen, our meeting today is going to be devoted to summing up the results of the LPP Group for the third quarter of the current year. ladies and gentlemen our meeting today is going to be devoted to summing up the results of the lpp group for the third quarter of the current year In our case, that means August, September, and October. in our case that means august september and october And it is what we will start with. and it is what we will start with Throughout the conference, we will also tell you about our plans for the nearest future and more long-distance plans, and we will complete the meeting with a Q&A session. throughout the conference we will also tell you about our plans for the nearest future and more long-distance plans and we will complete the meeting with a q&a session You have a chat box at your disposal. you have a chat box at your disposal You can see that chat box on your screen. you can see that chat box on your screen It is going to stay active and is of use to you should you want to pose a question. it is going to stay active and is of use to you should you want to pose a question If you still have any questions to clarify after the meeting has come to an end, please get in touch with our Investors' Relations Department, [email protected], and the media are invited to contact [email protected]. Our meeting today will last more or less an hour, so we will try to wrap everything up by 7:00 P.M. and stick to this time framework. Let's move on to summing up the results, financial results for the third quarter of the present year. Yes, without further delay, since we have a lot of material to cover, let us move on to summing up Q3 2025, the most important pieces of information: like-for-like stores, that is, those that have been in our network over 12 months, 4.3% of growth in like-for-likes. In a moment, we will see the details, but it is a very nice result. If you still have any questions to clarify after the meeting has come to an end, please get in touch with our Investors' Relations Department, [email protected], and the media are invited to contact [email protected]. if you still have any questions to clarify after the meeting has come to an end please get in touch with our investors' relations department [email protected] and the media are invited to contact [email protected] Our meeting today will last more or less an hour, so we will try to wrap everything up by 7:00 P.M. and stick to this time framework. our meeting today will last more or less an hour so we will try to wrap everything up by 7:00 p.m and stick to this time framework Let's move on to summing up the results, financial results for the third quarter of the present year. let's move on to summing up the results financial results for the third quarter of the present year Yes, without further delay, since we have a lot of material to cover, let us move on to summing up Q3 2025, the most important pieces of information: like-for-like stores, that is, those that have been in our network over 12 months, 4.3% of growth in like-for-likes. yes without further delay since we have a lot of material to cover let us move on to summing up q3 2025 the most important pieces of information like-for-like stores that is those that have been in our network over 12 months 4.3% of growth in like-for-likes In a moment, we will see the details, but it is a very nice result. in a moment we will see the details but it is a very nice result The stores that have been with us for a long time are not the only part of our business. We've been growing systemically. You've noticed that maybe recently that 232 stores opened, including 200 in Sinsay brand, but we also keep on growing in the other pillar of ours, that is, e-commerce sales. So PLN 1.7 billion in sales increased by 22% year on year in constant currencies. So great dynamics. And what always comes as a good piece of knowledge is the payment of the second tranche of the dividends: PLN 330 per share, so over PLN 1.2 billion paid dividends. Recently, the percentage of the dividend is around 4%. These are our plans. So this piece of information is always a very positive one that we eagerly share with you. These are our operational results. The stores that have been with us for a long time are not the only part of our business. the stores that have been with us for a long time are not the only part of our business We've been growing systemically. we've been growing systemically You've noticed that maybe recently that 232 stores opened, including 200 in Sinsay brand, but we also keep on growing in the other pillar of ours, that is, e-commerce sales. you've noticed that maybe recently that 232 stores opened including 200 in sinsay brand but we also keep on growing in the other pillar of ours that is e-commerce sales So PLN 1.7 billion in sales increased by 22% year on year in constant currencies. so pln 1.7 billion in sales increased by 22% year on year in constant currencies So great dynamics. so great dynamics And what always comes as a good piece of knowledge is the payment of the second tranche of the dividends: PLN 330 per share, so over PLN 1.2 billion paid dividends. and what always comes as a good piece of knowledge is the payment of the second tranche of the dividends pln 330 per share so over pln 1.2 billion paid dividends Recently, the percentage of the dividend is around 4%. recently the percentage of the dividend is around 4% These are our plans. these are our plans So this piece of information is always a very positive one that we eagerly share with you. so this piece of information is always a very positive one that we eagerly share with you These are our operational results. these are our operational results As for financial results, here we have four main indicators: sales in the first third quarter, PLN 6.1 billion, 22% dynamics, EBITDA PLN 1.7 billion, EBIT PLN 1.2 billion, and net profit PLN 800 million. Big, nice numbers in Q3. They are really lifting our spirits when we look at the comparison. EBITDA is 48% of growth year on year, EBIT 61%, and net profit 39% of growth year on year, so increases over the dynamics of sales, which of course means greater profitability, as we will see in greater detail on the slides to come. The business results that you've seen on the previous slide nicely translate also onto the financial results, and to begin with, maybe there is one more important disclaimer to share. The results that we've been looking at in terms of profit are those that have been adjusted, which means that there are purely business-like results. As for financial results, here we have four main indicators: sales in the first third quarter, PLN 6.1 billion, 22% dynamics, EBITDA PLN 1.7 billion, EBIT PLN 1.2 billion, and net profit PLN 800 million. as for financial results here we have four main indicators sales in the first third quarter, pln 6.1 billion 22% dynamics ebitda pln 1.7 billion ebit pln 1.2 billion and net profit pln 800 million Big, nice numbers in Q3. big nice numbers in q3 They are really lifting our spirits when we look at the comparison. they are really lifting our spirits when we look at the comparison EBITDA is 48% of growth year on year, EBIT 61%, and net profit 39% of growth year on year, so increases over the dynamics of sales, which of course means greater profitability, as we will see in greater detail on the slides to come. ebitda is 48% of growth year on year ebit 61% and net profit 39% of growth year on year so increases over the dynamics of sales which of course means greater profitability as we will see in greater detail on the slides to come The business results that you've seen on the previous slide nicely translate also onto the financial results, and to begin with, maybe there is one more important disclaimer to share. the business results that you've seen on the previous slide nicely translate also onto the financial results and to begin with maybe there is one more important disclaimer to share The results that we've been looking at in terms of profit are those that have been adjusted, which means that there are purely business-like results. the results that we've been looking at in terms of profit are those that have been adjusted which means that there are purely business-like results Everybody that is with us here today, go over our cyclical reports two weeks ago. We published one. The decision of the board, having analyzed the market situation, was to write off around PLN 800 million from the result. And the write-off result is from the situation of the Russian campaign of the Russian investor, who in 2022 took over the business after this investment. And we informed you about that in September. We talked about it in extenso, but the situation is dynamic enough to new information that we described in the current report. We had to reevaluate the situation, and that is what it led to in terms of business decisions. Just to remind you, the write-off is a non-cash one, so it does not mean any cash outflows from the company. Everybody that is with us here today, go over our cyclical reports two weeks ago. everybody that is with us here today go over our cyclical reports two weeks ago We published one. we published one The decision of the board, having analyzed the market situation, was to write off around PLN 800 million from the result. the decision of the board having analyzed the market situation was to write off around pln 800 million from the result And the write-off result is from the situation of the Russian campaign of the Russian investor, who in 2022 took over the business after this investment. and the write-off result is from the situation of the russian campaign of the russian investor who in 2022 took over the business after this investment And we informed you about that in September. and we informed you about that in september We talked about it in extenso, but the situation is dynamic enough to new information that we described in the current report. we talked about it in extenso but the situation is dynamic enough to new information that we described in the current report We had to reevaluate the situation, and that is what it led to in terms of business decisions. we had to reevaluate the situation and that is what it led to in terms of business decisions Just to remind you, the write-off is a non-cash one, so it does not mean any cash outflows from the company. just to remind you the write-off is a non-cash one so it does not mean any cash outflows from the company The situation of the company is really comfortable, and I believe that this is something that is reflected in the results we are presenting today. We have enough resources to develop, to invest, including into logistic-related Capex. And as we have commented, that is also, of course, stemmed from the current analysis of the situation, but we see no reasons to change anything in the dividend policy either. We simply keep on focusing on pure business, and the results that you see presented in this slide and in the slides to come focus purely on business. 2025 is also an acceleration of our growth, and traditionally, we show you the status: 232 stores open in Q3, nearly two-fold acceleration, over 30, 32 stores in LTMH, so Reserved Cropp House Mohito, and the third quarter and over 2,000 in Sinsay. The situation of the company is really comfortable, and I believe that this is something that is reflected in the results we are presenting today. the situation of the company is really comfortable and i believe that this is something that is reflected in the results we are presenting today We have enough resources to develop, to invest, including into logistic-related Capex. we have enough resources to develop to invest including into logistic-related capex And as we have commented, that is also, of course, stemmed from the current analysis of the situation, but we see no reasons to change anything in the dividend policy either. and as we have commented that is also of course stemmed from the current analysis of the situation but we see no reasons to change anything in the dividend policy either We simply keep on focusing on pure business, and the results that you see presented in this slide and in the slides to come focus purely on business. 2025 is also an acceleration of our growth, and traditionally, we show you the status: 232 stores open in Q3, nearly two-fold acceleration, over 30, 32 stores in LTMH, so Reserved Cropp House Mohito, and the third quarter and over 2,000 in Sinsay. we simply keep on focusing on pure business and the results that you see presented in this slide and in the slides to come focus purely on business 2025 is also an acceleration of our growth and traditionally we show you the status 232 stores open in q3 nearly two-fold acceleration over 30 32 stores in ltmh so reserved cropp house mohito and the third quarter and over 2,000 in sinsay The third quarter, we complete with a network that altogether has nearly 3,500 stores. Now, moving on to the details of financial results, we are going to look at particular indices in greater detail: the comparable sales, like-for-likes. This is what we started at the beginning with: the 4.3% generated over the last quarter. In a broader context, 7.5% in the third quarter of the last year. The basis was high in the period that you can see presented in the slide. That was the highest one. The base was demanding. That is why we talk about 4.3% as something positive and something that we are actually happy about. Now, let's take the results and comparable like-for-likes, and we add new sales. Then we can see that in the third quarter, the increase in sales reached 22%, 22% offline, and nearly 21% in e-commerce. The third quarter, we complete with a network that altogether has nearly 3,500 stores. the third quarter we complete with a network that altogether has nearly 3,500 stores Now, moving on to the details of financial results, we are going to look at particular indices in greater detail: the comparable sales, like-for-likes. now moving on to the details of financial results we are going to look at particular indices in greater detail the comparable sales like-for-likes This is what we started at the beginning with: the 4.3% generated over the last quarter. this is what we started at the beginning with the 4.3% generated over the last quarter In a broader context, 7.5% in the third quarter of the last year. in a broader context 7.5% in the third quarter of the last year The basis was high in the period that you can see presented in the slide. the basis was high in the period that you can see presented in the slide That was the highest one. that was the highest one The base was demanding. the base was demanding That is why we talk about 4.3% as something positive and something that we are actually happy about. that is why we talk about 4.3% as something positive and something that we are actually happy about Now, let's take the results and comparable like-for-likes, and we add new sales. now let's take the results and comparable like-for-likes and we add new sales Then we can see that in the third quarter, the increase in sales reached 22%, 22% offline, and nearly 21% in e-commerce. then we can see that in the third quarter the increase in sales reached 22% 22% offline and nearly 21% in e-commerce But after the nine months, the entire business growth by 20%. An additional piece of information is that there is an increase of foreign exchange rates that was minus 1.5%. So if we purify the results by that macro impact, that would be higher by 1.5 percentage points. That's our first leverage. The other one is gross profit margin. After the last Q&A session that we had in September, during that session, we signaled that there is the mathematically logical potential for increasing the margin because the second half of the year is clearly better. We've contracted the collection at a more favorable exchange rate, and back then, we could already signal that. Now, I'm happy that nothing went wrong, and we can see that everything went according to our plan, and we can report nice high margin. But after the nine months, the entire business growth by 20%. but after the nine months the entire business growth by 20% An additional piece of information is that there is an increase of foreign exchange rates that was minus 1.5%. an additional piece of information is that there is an increase of foreign exchange rates that was minus 1.5% So if we purify the results by that macro impact, that would be higher by 1.5 percentage points. so if we purify the results by that macro impact that would be higher by 1.5 percentage points That's our first leverage. that's our first leverage The other one is gross profit margin. the other one is gross profit margin After the last Q&A session that we had in September, during that session, we signaled that there is the mathematically logical potential for increasing the margin because the second half of the year is clearly better. after the last q&a session that we had in september during that session we signaled that there is the mathematically logical potential for increasing the margin because the second half of the year is clearly better We've contracted the collection at a more favorable exchange rate, and back then, we could already signal that. we've contracted the collection at a more favorable exchange rate and back then we could already signal that Now, I'm happy that nothing went wrong, and we can see that everything went according to our plan, and we can report nice high margin. now i'm happy that nothing went wrong and we can see that everything went according to our plan and we can report nice high margin And again, as was the case with like-for-likes on the scale that you can see here, the highest margin in the last period is to be seen. The zloty was very strong in recent years, and that's something that is also favorable. So sales, gross margin in the third leverage, that is, as G&A costs. And in this context, where we are most happy about this particular leverage, everything is in our hands. At the end of last year, we commented that we are building this scale. The cost, the dynamics, they were higher. Some of the locations, logistical locations, only opened themselves, and they only learned how to be efficient. But starting with Q1 this year, the costs behave the way we wish them to. We are efficient in the so-called back office. We have mastered the development rules there. And again, as was the case with like-for-likes on the scale that you can see here, the highest margin in the last period is to be seen. The zloty was very strong in recent years, and that's something that is also favorable. and again as was the case with like-for-likes on the scale that you can see here the highest margin in the last period is to be seen. the zloty was very strong in recent years and that's something that is also favorable So sales, gross margin in the third leverage, that is, as G&A costs. so sales gross margin in the third leverage that is as g&a costs And in this context, where we are most happy about this particular leverage, everything is in our hands. and in this context where we are most happy about this particular leverage everything is in our hands At the end of last year, we commented that we are building this scale. at the end of last year we commented that we are building this scale The cost, the dynamics, they were higher. the cost the dynamics they were higher Some of the locations, logistical locations, only opened themselves, and they only learned how to be efficient. some of the locations logistical locations only opened themselves and they only learned how to be efficient But starting with Q1 this year, the costs behave the way we wish them to. but starting with q1 this year the costs behave the way we wish them to We are efficient in the so-called back office. we are efficient in the so-called back office We have mastered the development rules there. we have mastered the development rules there We know that the teams that we have are sufficiently efficient, and we can grow with them, but two greatest leverages standing behind the drop of cost is, of course, logistics and marketing. Apart from the offline stores, when we think about the broadly understood logistics, this is the biggest group, and owing to our investments in this area, we can optimize the cost, and the other part is performance marketing, and here, giving you precise digits, we spent not even 8% in relation to the profit from the e-commerce channel compared to 9% last year, so this one percentage point is quite a leverage, and all in all, when we put these three components together, what we get is a really nice dynamic in profits growth. We saw nice numbers at the beginning. We know that the teams that we have are sufficiently efficient, and we can grow with them, but two greatest leverages standing behind the drop of cost is, of course, logistics and marketing. we know that the teams that we have are sufficiently efficient and we can grow with them but two greatest leverages standing behind the drop of cost is of course logistics and marketing Apart from the offline stores, when we think about the broadly understood logistics, this is the biggest group, and owing to our investments in this area, we can optimize the cost, and the other part is performance marketing, and here, giving you precise digits, we spent not even 8% in relation to the profit from the e-commerce channel compared to 9% last year, so this one percentage point is quite a leverage, and all in all, when we put these three components together, what we get is a really nice dynamic in profits growth. apart from the offline stores when we think about the broadly understood logistics this is the biggest group and owing to our investments in this area we can optimize the cost and the other part is performance marketing and here giving you precise digits we spent not even 8% in relation to the profit from the e-commerce channel compared to 9% last year so this one percentage point is quite a leverage and all in all when we put these three components together what we get is a really nice dynamic in profits growth We saw nice numbers at the beginning. we saw nice numbers at the beginning We are very happy about those growths because probably at this point last year, there was a lot of uncertainty. Of course, we believe in our strategy. It is well thought over, and now we are bearing fruit of the hard work that we carried out over the last months. The increase in profitability of around 5% at the EBITDA or EBIT level, these are really great results. In the third quarter, in terms of net profit, it is around 2.5, but again, giving you a broader context, this year, we've accelerated with investments quite much. We used the existing banking limits that we have quite extensively. We are very happy about those growths because probably at this point last year, there was a lot of uncertainty. we are very happy about those growths because probably at this point last year there was a lot of uncertainty Of course, we believe in our strategy. of course we believe in our strategy It is well thought over, and now we are bearing fruit of the hard work that we carried out over the last months. it is well thought over and now we are bearing fruit of the hard work that we carried out over the last months The increase in profitability of around 5% at the EBITDA or EBIT level, these are really great results. the increase in profitability of around 5% at the ebitda or ebit level these are really great results In the third quarter, in terms of net profit, it is around 2.5, but again, giving you a broader context, this year, we've accelerated with investments quite much. in the third quarter in terms of net profit it is around 2.5 but again giving you a broader context this year we've accelerated with investments quite much We used the existing banking limits that we have quite extensively. we used the existing banking limits that we have quite extensively But it, again, as informed towards the end of November, a big success of the entire organization and of the team involved in the project made it possible for us to close the complex refinancing structure for our debt so we can enjoy financial stability for the next three-five years, depending on the area of financing. And ever since then, so ever since Q4 in consecutive periods, those financial costs are going to be even more optimized. So everything is heading in a really nice direction. And the nine months, with each quarter, we were kept accelerating, also showed that when you look at the dynamics, on average, plus minus 30% of increase at any level, reminding you that sales after nine months grew by 20%. Then automatically, that translates into the increases in profitability at any level. Now we can smoothly go to the operational indices, inventory. But it, again, as informed towards the end of November, a big success of the entire organization and of the team involved in the project made it possible for us to close the complex refinancing structure for our debt so we can enjoy financial stability for the next three- five years, depending on the area of financing. but it again as informed towards the end of november a big success of the entire organization and of the team involved in the project made it possible for us to close the complex refinancing structure for our debt so we can enjoy financial stability for the next three- five years depending on the area of financing And ever since then, so ever since Q4 in consecutive periods, those financial costs are going to be even more optimized. and ever since then so ever since q4 in consecutive periods those financial costs are going to be even more optimized So everything is heading in a really nice direction. so everything is heading in a really nice direction And the nine months, with each quarter, we were kept accelerating, also showed that when you look at the dynamics, on average, plus minus 30% of increase at any level, reminding you that sales after nine months grew by 20%. and the nine months with each quarter we were kept accelerating also showed that when you look at the dynamics on average plus minus 30% of increase at any level reminding you that sales after nine months grew by 20% Then automatically, that translates into the increases in profitability at any level. then automatically that translates into the increases in profitability at any level Now we can smoothly go to the operational indices, inventory. now we can smoothly go to the operational indices inventory The image is really great. The last bar that you can see is below the second quarter, particularly the line that shows you the value of our inventory per square meter. It dropped quite significantly here during the first half of the year, we entered the first half with higher inventory levels. You might remember that in June, we reduced our guidance. With this stock, we've been working pretty actively. What was supposed to delay was delayed in terms of supplies, and then we lowered the purchase budgets for consecutive periods in order to make some space for this inventory, so this is the result that we got to. We still have some more goods coming before the end of the year, but I don't think that we will get anywhere near 2,000. I remember what I said in September when we commented on behalf of the company. The image is really great. the image is really great The last bar that you can see is below the second quarter, particularly the line that shows you the value of our inventory per square meter. the last bar that you can see is below the second quarter particularly the line that shows you the value of our inventory per square meter It dropped quite significantly here during the first half of the year, we entered the first half with higher inventory levels. it dropped quite significantly here during the first half of the year we entered the first half with higher inventory levels You might remember that in June, we reduced our guidance. you might remember that in june we reduced our guidance With this stock, we've been working pretty actively. with this stock we've been working pretty actively What was supposed to delay was delayed in terms of supplies, and then we lowered the purchase budgets for consecutive periods in order to make some space for this inventory, so this is the result that we got to. what was supposed to delay was delayed in terms of supplies and then we lowered the purchase budgets for consecutive periods in order to make some space for this inventory so this is the result that we got to We still have some more goods coming before the end of the year, but I don't think that we will get anywhere near 2,000. we still have some more goods coming before the end of the year but i don't think that we will get anywhere near 2,000 I remember what I said in September when we commented on behalf of the company. i remember what i said in september when we commented on behalf of the company Still, in the first quarter, maybe in the first half, we'll be working in this inventory that we are shifting from those periods. You can see, especially in the Sinsay brand, this margin was under slight pressure. But we can see, looking at Q3, that in terms of business challenge, we can really generate nice results. Inventories, of course, are related to the working capital. This is a quite boring slide. We've been able for some time now to generate the negative level. And new financing gives us additionally more comfort in terms of reverse factoring investment. So yet another area, as Warren Buffett said, banking should be like that. And we are happy to have this boring comfort, so to speak. Now, in terms of logistics, it is marked by high CapEx. Our CapEx is foreseeable. The blue bar is looking from bottom up. Still, in the first quarter, maybe in the first half, we'll be working in this inventory that we are shifting from those periods. still in the first quarter maybe in the first half we'll be working in this inventory that we are shifting from those periods You can see, especially in the Sinsay brand, this margin was under slight pressure. you can see especially in the sinsay brand this margin was under slight pressure But we can see, looking at Q3, that in terms of business challenge, we can really generate nice results. but we can see looking at q3 that in terms of business challenge we can really generate nice results Inventories, of course, are related to the working capital. inventories of course are related to the working capital This is a quite boring slide. this is a quite boring slide We've been able for some time now to generate the negative level. we've been able for some time now to generate the negative level And new financing gives us additionally more comfort in terms of reverse factoring investment. and new financing gives us additionally more comfort in terms of reverse factoring investment So yet another area, as Warren Buffett said, banking should be like that. so yet another area as warren buffett said banking should be like that And we are happy to have this boring comfort, so to speak. and we are happy to have this boring comfort so to speak Now, in terms of logistics, it is marked by high CapEx. now in terms of logistics it is marked by high capex Our CapEx is foreseeable. our capex is foreseeable The blue bar is looking from bottom up. the blue bar is looking from bottom up These are expenditures for stores, so just to remind you, EUR 450 per square meter in the Sinsay brand and EUR 800 in other brands is the average. And in terms of logistics, this is the median bar. This is the area that we sped up on already last year, over a billion spent this year, but we will see on the slides that still next year we'll be spending. We are spending a lot, but less than this year is going to be spent. But as we saw in the OPEX part, these are high-quality investments, and they really allow us to generate nice savings, this operational lever. And what makes us happy is that our growth is dynamic and fast, but all that is carried out with safe debt level. The first and second quarter, slightly high, but then 1.3 debt to EBITDA that was really comfortable. These are expenditures for stores, so just to remind you, EUR 450 per square meter in the Sinsay brand and EUR 800 in other brands is the average. these are expenditures for stores so just to remind you, eur 450 per square meter in the sinsay brand and eur 800 in other brands is the average And in terms of logistics, this is the median bar. and in terms of logistics this is the median bar This is the area that we sped up on already last year, over a billion spent this year, but we will see on the slides that still next year we'll be spending. this is the area that we sped up on already last year over a billion spent this year but we will see on the slides that still next year we'll be spending We are spending a lot, but less than this year is going to be spent. we are spending a lot but less than this year is going to be spent But as we saw in the OPEX part, these are high-quality investments, and they really allow us to generate nice savings, this operational lever. but as we saw in the opex part these are high-quality investments and they really allow us to generate nice savings this operational lever And what makes us happy is that our growth is dynamic and fast, but all that is carried out with safe debt level. and what makes us happy is that our growth is dynamic and fast but all that is carried out with safe debt level The first and second quarter, slightly high, but then 1.3 debt to EBITDA that was really comfortable. the first and second quarter slightly high but then 1.3 debt to ebitda that was really comfortable Now it's 1.1, so the situation is really safe. And I guess that the commentary, well, is not really necessary here. So that was the summary of the third quarter and the nine months, but it is December already, so in Q4. We can now observe what is happening on the market. So over to Magdalena. Now it's 1.1, so the situation is really safe. now it's 1.1 so the situation is really safe And I guess that the commentary, well, is not really necessary here. and i guess that the commentary well is not really necessary here So that was the summary of the third quarter and the nine months, but it is December already, so in Q4. so that was the summary of the third quarter and the nine months but it is december already so in q4 We can now observe what is happening on the market. we can now observe what is happening on the market So over to Magdalena. so over to magdalena

Speaker 2: Thank you. Before we move on to our plans and goals for 2025 and 2026, a few words about the fourth quarter. In November, we have Black Friday and Black Week, so we can say this is the season for discounts in stores. Today, it's not that clients are not that enthusiastic, but the spending these days is much higher than on weekends before and after the Black Week. We started on the 26th of November, so on Wednesday, and that ended on the 1st of December, so during Cyber Monday. Thank you. thank you Before we move on to our plans and goals for 2025 and 2026, a few words about the fourth quarter. before we move on to our plans and goals for 2025 and 2026 a few words about the fourth quarter In November, we have Black Friday and Black Week, so we can say this is the season for discounts in stores. in november we have black friday and black week so we can say this is the season for discounts in stores Today, it's not that clients are not that enthusiastic, but the spending these days is much higher than on weekends before and after the Black Week. today it's not that clients are not that enthusiastic but the spending these days is much higher than on weekends before and after the black week We started on the 26th of November, so on Wednesday, and that ended on the 1st of December, so during Cyber Monday. we started on the 26th of november so on wednesday and that ended on the 1st of december so during cyber monday In conclusion, we can say that we are very happy about the Black Week and this season. 32% in omnichannel. This is the increase. 40% online and 25% offline. Looking at the fourth quarter, from the 1st November to 9th December, we can say that the fourth quarter began a bit below our expectations, but from the second weekend in Poland, the sales improved. Most probably, this was affected by strong October where most of the clients did their shopping over there as for the autumn apparel, and then the clients are waiting for the Christmas season, so this is presented here in the slide. When we look at the fourth quarter, we look at it positively because the trade in December might be supported by the calendar-related effect. Christmas Eve is going to be a day off. In conclusion, we can say that we are very happy about the Black Week and this season. 32% in omnichannel. in conclusion we can say that we are very happy about the black week and this season 32% in omnichannel This is the increase. 40% online and 25% offline. this is the increase 40% online and 25% offline Looking at the fourth quarter, from the 1st November to 9th December, we can say that the fourth quarter began a bit below our expectations, but from the second weekend in Poland, the sales improved. looking at the fourth quarter from the 1st november to 9th december we can say that the fourth quarter began a bit below our expectations but from the second weekend in poland the sales improved Most probably, this was affected by strong October where most of the clients did their shopping over there as for the autumn apparel, and then the clients are waiting for the Christmas season, so this is presented here in the slide. most probably this was affected by strong october where most of the clients did their shopping over there as for the autumn apparel and then the clients are waiting for the christmas season so this is presented here in the slide When we look at the fourth quarter, we look at it positively because the trade in December might be supported by the calendar-related effect. when we look at the fourth quarter we look at it positively because the trade in december might be supported by the calendar-related effect Christmas Eve is going to be a day off. christmas eve is going to be a day off We also have working Sundays, and the data shows that the average Sunday, these are higher sales than on a Christmas Eve. In conclusion, regarding the fourth quarter, I would like to say that we plan to open 350-400 new stores of all our brands, the majority related to Sinsay. And now we can move on to detailed plans as for 2025 and 2026. Thank you. When we look at nine months of very good nine months, and we add on top of that the prospects rather optimistic presented by Magdalena, we can see improving dynamics. We can confirm what we signaled in Q&A in September. So the market situation and the results that we saw at that time were delivered in the third quarter. So we have now a few weeks of this year, and we can improve our guidance. We also have working Sundays, and the data shows that the average Sunday, these are higher sales than on a Christmas Eve. we also have working sundays and the data shows that the average sunday these are higher sales than on a christmas eve In conclusion, regarding the fourth quarter, I would like to say that we plan to open 350-400 new stores of all our brands, the majority related to Sinsay. in conclusion regarding the fourth quarter i would like to say that we plan to open 350-400 new stores of all our brands the majority related to sinsay And now we can move on to detailed plans as for 2025 and 2026. and now we can move on to detailed plans as for 2025 and 2026 Thank you. thank you When we look at nine months of very good nine months, and we add on top of that the prospects rather optimistic presented by Magdalena, we can see improving dynamics. when we look at nine months of very good nine months and we add on top of that the prospects rather optimistic presented by magdalena we can see improving dynamics We can confirm what we signaled in Q&A in September. we can confirm what we signaled in q&a in september So the market situation and the results that we saw at that time were delivered in the third quarter. so the market situation and the results that we saw at that time were delivered in the third quarter So we have now a few weeks of this year, and we can improve our guidance. so we have now a few weeks of this year and we can improve our guidance So the new expectations for this year, at least EUR 23 billion of sales in both channels, 20% increase in online and offline. It does not change compared to the previous information. Significantly increased gross profit margin from 54%-55%. OPEX related to sales, so 40.5%-41%. That is the S and G&A of sales. So whether this is EBITDA or net profit, naturally, this is increasing compared to our expectations. Capex, a small reduction. This is more cash that stays with the company. This results only from a smaller number of stores open and net debt, rather comfortable 1.1. So such updated guidance for 2025 is our new grounds for our goals, for our targets for 2026. The financial year is going to be reported in the second half of March, but we want to provide you the knowledge during this meeting. So the new expectations for this year, at least EUR 23 billion of sales in both channels, 20% increase in online and offline. so the new expectations for this year at least eur 23 billion of sales in both channels 20% increase in online and offline It does not change compared to the previous information. it does not change compared to the previous information Significantly increased gross profit margin from 54%- 55%. significantly increased gross profit margin from 54%- 55% OPEX related to sales, so 40.5%-41%. opex related to sales so 40.5%-41% That is the S and G&A of sales. that is the s and g&a of sales So whether this is EBITDA or net profit, naturally, this is increasing compared to our expectations. so whether this is ebitda or net profit naturally this is increasing compared to our expectations Capex, a small reduction. capex a small reduction This is more cash that stays with the company. this is more cash that stays with the company This results only from a smaller number of stores open and net debt, rather comfortable 1.1. this results only from a smaller number of stores open and net debt rather comfortable 1.1 So such updated guidance for 2025 is our new grounds for our goals, for our targets for 2026. so such updated guidance for 2025 is our new grounds for our goals for our targets for 2026 The financial year is going to be reported in the second half of March, but we want to provide you the knowledge during this meeting. the financial year is going to be reported in the second half of march but we want to provide you the knowledge during this meeting So here we have 2025 in the first column, so the higher forecast for this year. And from that, we move on to 2026. What do we expect? At least €28 billion of sales, over 20%, maybe €25 in offline even as for the increase in 2026. After the third and fourth quarter, we can see that the gross profit margin is dropping a bit. This results from the natural participation of Sinsay. We know that this profit margin is a bit lower. With more development, it's going to be more diluted. As for SG&A of sales and CapEx, give us still room to generate this positive result, so around 40, 41. And when we see the EBITDA, similar results as this year. And 22, 23, this is the EBITDA margin. CapEx a bit smaller compared to this year. This results from lower spending on logistics. So here we have 2025 in the first column, so the higher forecast for this year. so here we have 2025 in the first column so the higher forecast for this year And from that, we move on to 2026. and from that we move on to 2026 What do we expect? what do we expect At least €28 billion of sales, over 20%, maybe €25 in offline even as for the increase in 2026. at least €28 billion of sales over 20% maybe €25 in offline even as for the increase in 2026 After the third and fourth quarter, we can see that the gross profit margin is dropping a bit. after the third and fourth quarter we can see that the gross profit margin is dropping a bit This results from the natural participation of Sinsay. this results from the natural participation of sinsay We know that this profit margin is a bit lower. we know that this profit margin is a bit lower With more development, it's going to be more diluted. with more development it's going to be more diluted As for SG&A of sales and CapEx, give us still room to generate this positive result, so around 40, 41. as for sg&a of sales and capex give us still room to generate this positive result so around 40 41 And when we see the EBITDA, similar results as this year. and when we see the ebitda similar results as this year And 22, 23, this is the EBITDA margin. and 22 23 this is the ebitda margin CapEx a bit smaller compared to this year. capex a bit smaller compared to this year This results from lower spending on logistics. this results from lower spending on logistics This year, we had an accumulation in 2026. We are going to spend for robotization, and this is only one investment, one warehouse in Brześć. Net debt and the floor space increase comparable, so nothing is happening. This is really very positive, boring situation. So that was the conclusion. As for the nine months from spring, we have this three-year strategy, a short-term strategy in our company. We provide reports and we provide where we are up to 2027. So after this strong acceleration, we have some observations. We continue with our strategy, but some things needed to be adjusted. So the direction does not change. So this is our direction. Sinsay is the growth engine for LPP. This year, we had an accumulation in 2026. this year we had an accumulation in 2026 We are going to spend for robotization, and this is only one investment, one warehouse in Brześć. we are going to spend for robotization and this is only one investment one warehouse in brześć Net debt and the floor space increase comparable, so nothing is happening. net debt and the floor space increase comparable so nothing is happening This is really very positive, boring situation. this is really very positive boring situation So that was the conclusion. so that was the conclusion As for the nine months from spring, we have this three-year strategy, a short-term strategy in our company. as for the nine months from spring we have this three-year strategy a short-term strategy in our company We provide reports and we provide where we are up to 2027. we provide reports and we provide where we are up to 2027 So after this strong acceleration, we have some observations. so after this strong acceleration we have some observations We continue with our strategy, but some things needed to be adjusted. we continue with our strategy but some things needed to be adjusted So the direction does not change. so the direction does not change So this is our direction. so this is our direction Sinsay is the growth engine for LPP. sinsay is the growth engine for lpp The development is going to involve opening of new stores in smaller towns, maybe not so many locations here in heritage brands with brands that have significant ambitious goals, single-digit like-for-likes to cover the inflation. Of course, the top target growth with focus on profitability. In June, we showed you the update of the information. Why Sinsay is this drive engine, why we focus on Sinsay, why this is working. We can see that after nine months of results, when we look at operational details and financial details, the offline store, 30% of EBITDA here. We know that we have some challenges as for managing the stock. So even with standard issue here, we can generate a significant EBITDA. Historically speaking, whether this is 24 or 25, you can see the share of profitable stores, this is much better. The development is going to involve opening of new stores in smaller towns, maybe not so many locations here in heritage brands with brands that have significant ambitious goals, single-digit like-for-likes to cover the inflation. the development is going to involve opening of new stores in smaller towns maybe not so many locations here in heritage brands with brands that have significant ambitious goals single-digit like-for-likes to cover the inflation Of course, the top target growth with focus on profitability. of course the top target growth with focus on profitability In June, we showed you the update of the information. in june we showed you the update of the information Why Sinsay is this drive engine, why we focus on Sinsay, why this is working. why sinsay is this drive engine why we focus on sinsay why this is working We can see that after nine months of results, when we look at operational details and financial details, the offline store, 30% of EBITDA here. we can see that after nine months of results when we look at operational details and financial details the offline store 30% of ebitda here We know that we have some challenges as for managing the stock. we know that we have some challenges as for managing the stock So even with standard issue here, we can generate a significant EBITDA. so even with standard issue here we can generate a significant ebitda Historically speaking, whether this is 24 or 25, you can see the share of profitable stores, this is much better. historically speaking whether this is 24 or 25 you can see the share of profitable stores this is much better When we add more details on the left, you can see a graph, profitability per store size. So the mini, these are the smaller ones. You remember in June, this format was stopped for a moment. So the tests are happening. We have first conclusions. It is very promising, but we want to make sure that when we go back to this plan, these stores are going to be profitable and we will have good know-how how to do that, what is happening, what is the offer for the customers. So until we have certainty, we freeze this idea. We can see that other store size are very profitable and the biggest ones even much, much better. This translates into a very good payback period, 16 months. This is one month lower than before. When we add more details on the left, you can see a graph, profitability per store size. when we add more details on the left you can see a graph profitability per store size So the mini, these are the smaller ones. so the mini these are the smaller ones You remember in June, this format was stopped for a moment. you remember in june this format was stopped for a moment So the tests are happening. so the tests are happening We have first conclusions. we have first conclusions It is very promising, but we want to make sure that when we go back to this plan, these stores are going to be profitable and we will have good know-how how to do that, what is happening, what is the offer for the customers. it is very promising but we want to make sure that when we go back to this plan these stores are going to be profitable and we will have good know-how how to do that what is happening what is the offer for the customers So until we have certainty, we freeze this idea. so until we have certainty we freeze this idea We can see that other store size are very profitable and the biggest ones even much, much better. we can see that other store size are very profitable and the biggest ones even much much better This translates into a very good payback period, 16 months. this translates into a very good payback period 16 months This is one month lower than before. this is one month lower than before When we compare the year with significant challenges in Eastern Europe, 12 or 13 months, this is a good result. We are very happy about where we are with Sinsay going into the future. I believe that from your perspective, a good important information. The updated plan for the launch of new stores. We planned 1,000. We can see that the fourth quarter is going to be the more intense. Some are going to be shifted to the next year. In some regions, we observed a certain slowdown in Slovakia, in Czechia, and Hungary. These are the regions we don't see a significant interest in such stores on the market. These regions are rather cautious in their approach. We stop for a moment. The mini format, as I mentioned, until we have hard data and conclusions and certainty, we don't do that. When we compare the year with significant challenges in Eastern Europe, 12 or 13 months, this is a good result. when we compare the year with significant challenges in eastern europe 12 or 13 months this is a good result We are very happy about where we are with Sinsay going into the future. we are very happy about where we are with sinsay going into the future I believe that from your perspective, a good important information. i believe that from your perspective a good important information The updated plan for the launch of new stores. the updated plan for the launch of new stores We planned 1,000. we planned 1,000 We can see that the fourth quarter is going to be the more intense. we can see that the fourth quarter is going to be the more intense Some are going to be shifted to the next year. some are going to be shifted to the next year In some regions, we observed a certain slowdown in Slovakia, in Czechia, and Hungary. in some regions we observed a certain slowdown in slovakia in czechia and hungary These are the regions we don't see a significant interest in such stores on the market. these are the regions we don't see a significant interest in such stores on the market These regions are rather cautious in their approach. these regions are rather cautious in their approach We stop for a moment. we stop for a moment The mini format, as I mentioned, until we have hard data and conclusions and certainty, we don't do that. the mini format as i mentioned until we have hard data and conclusions and certainty we don't do that We have a significant group. We have information coming to us. So when we have certainty, we will go back to that very quickly, but we need to be sure. And in eastern Ukraine, we had a significant challenge related to the quality of data. So we entered 15,000, 20,000 towns, and then it turned out that this town was much, much smaller. So we decided that we are not going to enter towns below around 30,000. So when we take all these elements into consideration, it means that we take care of the profitability and the updated forecast for the future results from that. So we focus on a higher margin. And in 2026 and 2027, we can see the potential for slow, gradual acceleration. The development of offline, not only Sinsay, but our heritage brands, they also are ambitious in like-for-likes. We have a significant group. we have a significant group We have information coming to us. we have information coming to us So when we have certainty, we will go back to that very quickly, but we need to be sure. so when we have certainty we will go back to that very quickly but we need to be sure And in eastern Ukraine, we had a significant challenge related to the quality of data. and in eastern ukraine we had a significant challenge related to the quality of data So we entered 15,000, 20,000 towns, and then it turned out that this town was much, much smaller. so we entered 15,000 20,000 towns and then it turned out that this town was much much smaller So we decided that we are not going to enter towns below around 30,000. so we decided that we are not going to enter towns below around 30,000 So when we take all these elements into consideration, it means that we take care of the profitability and the updated forecast for the future results from that. so when we take all these elements into consideration it means that we take care of the profitability and the updated forecast for the future results from that So we focus on a higher margin. so we focus on a higher margin And in 2026 and 2027, we can see the potential for slow, gradual acceleration. and in 2026 and 2027 we can see the potential for slow gradual acceleration The development of offline, not only Sinsay, but our heritage brands, they also are ambitious in like-for-likes. the development of offline not only sinsay but our heritage brands they also are ambitious in like-for-likes E-commerce, we also want to have 20-20% plus as for growth. We have significant leverage. New markets, Central Asia, our mobile app, this is also working very well, 80% in online through an app in Sinsay. We broaden our offer in non-garment segment. In the following months, this is going to be a very intensive work for us as for optimization of our offer. We can see that the sales is good. We still need to work on the margin, but we had a lot of the tasks, and we are going to move on into these aspects. That is all regarding sales. E-commerce, we also want to have 20-20% plus as for growth. e-commerce we also want to have 20-20% plus as for growth We have significant leverage. we have significant leverage New markets, Central Asia, our mobile app, this is also working very well, 80% in online through an app in Sinsay. new markets central asia our mobile app this is also working very well 80% in online through an app in sinsay We broaden our offer in non-garment segment. we broaden our offer in non-garment segment In the following months, this is going to be a very intensive work for us as for optimization of our offer. in the following months this is going to be a very intensive work for us as for optimization of our offer We can see that the sales is good. we can see that the sales is good We still need to work on the margin, but we had a lot of the tasks, and we are going to move on into these aspects. we still need to work on the margin but we had a lot of the tasks and we are going to move on into these aspects That is all regarding sales. that is all regarding sales

Speaker 1: The allocation of capital again, a positive note, going bottom up, PLN 1.6 billion, simple number of openings, times CapEx envisaged, and the main one, these are the expenditure on logistics. The allocation of capital again, a positive note, going bottom up, PLN 1.6 billion, simple number of openings, times CapEx envisaged, and the main one, these are the expenditure on logistics. the allocation of capital again a positive note going bottom up pln 1.6 billion simple number of openings times capex envisaged and the main one these are the expenditure on logistics We could see that leverage in this area is particularly clear and visible. There's a clear return on investment. So next year, PLN 700 million, and we are continuing robotization in main locations and completing one center in Brześć in terms of a building, and 2027 will be the continuation of equipping warehouses and adding robotic solutions. We are still thinking about one more location in terms of e-commerce, but this is still under the analysis of PLN 500 million. In two years' time, this is the upper number that we are to expect. Now, if we sum it all up, then 2027, that is the last year that we are running to another three-year perspective, we are reducing top line a bit, so this growth in terms of revenue, so minimum PLN 33 billion in 2027, 1.7, that's the growth factor versus 2024. We could see that leverage in this area is particularly clear and visible. we could see that leverage in this area is particularly clear and visible There's a clear return on investment. there's a clear return on investment So next year, PLN 700 million, and we are continuing robotization in main locations and completing one center in Brześć in terms of a building, and 2027 will be the continuation of equipping warehouses and adding robotic solutions. so next year, pln 700 million and we are continuing robotization in main locations and completing one center in brześć in terms of a building and 2027 will be the continuation of equipping warehouses and adding robotic solutions We are still thinking about one more location in terms of e-commerce, but this is still under the analysis of PLN 500 million. we are still thinking about one more location in terms of e-commerce but this is still under the analysis of pln 500 million In two years' time, this is the upper number that we are to expect. in two years' time this is the upper number that we are to expect Now, if we sum it all up, then 2027, that is the last year that we are running to another three-year perspective, we are reducing top line a bit, so this growth in terms of revenue, so minimum PLN 33 billion in 2027, 1.7, that's the growth factor versus 2024. now if we sum it all up then 2027 that is the last year that we are running to another three-year perspective we are reducing top line a bit so this growth in terms of revenue so minimum pln 33 billion in 2027 1.7 that's the growth factor versus 2024 Now, two consecutive lines, so gross margin and OPEX, we are improving the quality here clearly, and we see that this operational leverage is working. Increase of EBITDA is at the level of 1.8 versus 2024. So that's an improvement in profitability, between 21.5% and 22.5%. So systematic growth of revenue, this is what we expect. And of course, that also means that we need to think about increasing dividends equally. We are a dividend company, as I mentioned, and it has been the case for some years now. The dividend yield is on the rise, and we do not have any reason to modify this trajectory. And I believe that, well, we started with this positive tone, and I guess we can end also on a similar note. So great results after nine months, updated strategy, but we are remaining on the same trajectory. Now, two consecutive lines, so gross margin and OPEX, we are improving the quality here clearly, and we see that this operational leverage is working. now two consecutive lines so gross margin and opex we are improving the quality here clearly and we see that this operational leverage is working Increase of EBITDA is at the level of 1.8 versus 2024. increase of ebitda is at the level of 1.8 versus 2024 So that's an improvement in profitability, between 21.5% and 22.5%. so that's an improvement in profitability between 21.5% and 22.5% So systematic growth of revenue, this is what we expect. so systematic growth of revenue this is what we expect And of course, that also means that we need to think about increasing dividends equally. and of course that also means that we need to think about increasing dividends equally We are a dividend company, as I mentioned, and it has been the case for some years now. we are a dividend company as i mentioned and it has been the case for some years now The dividend yield is on the rise, and we do not have any reason to modify this trajectory. the dividend yield is on the rise and we do not have any reason to modify this trajectory And I believe that, well, we started with this positive tone, and I guess we can end also on a similar note. and i believe that well we started with this positive tone and i guess we can end also on a similar note So great results after nine months, updated strategy, but we are remaining on the same trajectory. so great results after nine months updated strategy but we are remaining on the same trajectory We know where we are heading. We simply are approaching it in a slightly different way. The prospects of growth and dividend sharing with our stakeholders, of course, does not change. So I guess we can swiftly move on to our Q&A session now. Let us start then. Question number one concerns insurance related to the fire in Romania. And there is a request to define insurance liabilities. What value do we have here in the balance sheet? How much was already given by the insurer? And in which quarter was it put into the books? Well, the main numbers and the main events in the second quarter, PLN 351 million of the write-off was the loss that we suffered concerning our assets and goods because we rented out the building itself, but the equipment was ours. We know where we are heading. we know where we are heading We simply are approaching it in a slightly different way. we simply are approaching it in a slightly different way The prospects of growth and dividend sharing with our stakeholders, of course, does not change. the prospects of growth and dividend sharing with our stakeholders of course does not change So I guess we can swiftly move on to our Q&A session now. so i guess we can swiftly move on to our q&a session now Let us start then. let us start then Question number one concerns insurance related to the fire in Romania. question number one concerns insurance related to the fire in romania And there is a request to define insurance liabilities. and there is a request to define insurance liabilities What value do we have here in the balance sheet? what value do we have here in the balance sheet How much was already given by the insurer? how much was already given by the insurer And in which quarter was it put into the books? and in which quarter was it put into the books Well, the main numbers and the main events in the second quarter, PLN 351 million of the write-off was the loss that we suffered concerning our assets and goods because we rented out the building itself, but the equipment was ours. well the main numbers and the main events in the second quarter pln 351 million of the write-off was the loss that we suffered concerning our assets and goods because we rented out the building itself but the equipment was ours We also had the auditor made it possible for us to book it. That was the second quarter. Now, the current update, around two weeks ago, we got an advance payment that was precisely PLN 20 million. Yesterday or the day before yesterday, that's the latest piece of information. We got informed that further PLN 200 million would get into our account owing to this loss concerning the liquidation, the financial part of it. We need to understand that from the formal side, these are thousands and thousands of documents that we need to deliver, but our accountants' teams work on that regularly, and we can see that it is heading in the right direction. These are the amounts that are going to be booked in Q4, and we keep on working systematically on that. Further amounts will be getting to our account. We also had the auditor made it possible for us to book it. we also had the auditor made it possible for us to book it That was the second quarter. that was the second quarter Now, the current update, around two weeks ago, we got an advance payment that was precisely PLN 20 million. now the current update around two weeks ago we got an advance payment that was precisely pln 20 million Yesterday or the day before yesterday, that's the latest piece of information. yesterday or the day before yesterday that's the latest piece of information We got informed that further PLN 200 million would get into our account owing to this loss concerning the liquidation, the financial part of it. we got informed that further pln 200 million would get into our account owing to this loss concerning the liquidation the financial part of it We need to understand that from the formal side, these are thousands and thousands of documents that we need to deliver, but our accountants' teams work on that regularly, and we can see that it is heading in the right direction. we need to understand that from the formal side these are thousands and thousands of documents that we need to deliver but our accountants' teams work on that regularly and we can see that it is heading in the right direction These are the amounts that are going to be booked in Q4, and we keep on working systematically on that. these are the amounts that are going to be booked in q4 and we keep on working systematically on that Further amounts will be getting to our account. further amounts will be getting to our account The other part, business interruption insurance, so the loss of margin and additional operational costs. This period expires after nine months, so it will be only in spring, at the end of March, when we will start summing it up and talk about the payments, so no earlier than probably in Q2, Q3, that we can expect any income from that side. Now, inventory quarter to quarter dropped by over PLN 400 million. Could you explain that? Well, yes. As I've mentioned, we simply had too much in terms of goods. And once again, 1,500 stores, the initial plan, we'll see that we'll open 910, talking about Sinsay. So we entered it with a great stock. So this drop after the first quarter, when the LFLs was positive, we would still be testing what the reason was. We didn't put the brake to hold so much. The other part, business interruption insurance, so the loss of margin and additional operational costs. the other part business interruption insurance so the loss of margin and additional operational costs This period expires after nine months, so it will be only in spring, at the end of March, when we will start summing it up and talk about the payments, so no earlier than probably in Q2, Q3, that we can expect any income from that side. this period expires after nine months so it will be only in spring at the end of march when we will start summing it up and talk about the payments so no earlier than probably in q2 q3 that we can expect any income from that side Now, inventory quarter to quarter dropped by over PLN 400 million. now inventory quarter to quarter dropped by over pln 400 million Could you explain that? could you explain that Well, yes. well yes As I've mentioned, we simply had too much in terms of goods. as i've mentioned we simply had too much in terms of goods And once again, 1,500 stores, the initial plan, we'll see that we'll open 910, talking about Sinsay. and once again 1,500 stores the initial plan we'll see that we'll open 910 talking about sinsay So we entered it with a great stock. so we entered it with a great stock So this drop after the first quarter, when the LFLs was positive, we would still be testing what the reason was. so this drop after the first quarter when the lfls was positive we would still be testing what the reason was We didn't put the brake to hold so much. we didn't put the brake to hold so much But then, as we saw months passing, it became clear that we need to do something about it. And the results offered themselves in quarter three. So there is no mysterious knowledge. It is simply hard work of our teams here, those that deliver their goods and our designers. Assess 26. So the spring and summer season that we are entering slowly will have a greater share of the goods that were ordered beforehand. But we can see that in the first half of the year, we will get it over and done with. That's just a standard business challenge that we are managing as we go. Still on the inventories and the stocks, it's about the optimum level of inventories for another year. So what would be the level we would like to keep it at? Between 1,700 PLN and 1,800 PLN per sq m. But then, as we saw months passing, it became clear that we need to do something about it. but then as we saw months passing it became clear that we need to do something about it And the results offered themselves in quarter three. and the results offered themselves in quarter three So there is no mysterious knowledge. so there is no mysterious knowledge It is simply hard work of our teams here, those that deliver their goods and our designers. it is simply hard work of our teams here those that deliver their goods and our designers Assess 26. assess 26 So the spring and summer season that we are entering slowly will have a greater share of the goods that were ordered beforehand. so the spring and summer season that we are entering slowly will have a greater share of the goods that were ordered beforehand But we can see that in the first half of the year, we will get it over and done with. but we can see that in the first half of the year we will get it over and done with That's just a standard business challenge that we are managing as we go. that's just a standard business challenge that we are managing as we go Still on the inventories and the stocks, it's about the optimum level of inventories for another year. still on the inventories and the stocks it's about the optimum level of inventories for another year So what would be the level we would like to keep it at? so what would be the level we would like to keep it at Between 1,700 PLN and 1,800 PLN per sq m. between 1,700 pln and 1,800 pln per sq m Can you see any chance to increase, improve LFL in Sinsay? What would contribute to that? It is a very good question and again, a broader context. When we look at a slide from our presentation with like-for-likes, we will see that, of course, our appetites were greater, but it is the market. Our teams do their utmost, and we always offer the best possible collections. The client voted with their decisions. We have our conclusions. We are entering the autumn season with our homework done and lessons learned. 2023 was another period when we had a lot of inventories and the margins were what they were. The like-for-likes were what they were. Reserved is a different brand. The first half of the year was actually in the same situation, minus 5% on likes in the first quarter and similarly in the second. Can you see any chance to increase, improve LFL in Sinsay? can you see any chance to increase improve lfl in sinsay What would contribute to that? what would contribute to that It is a very good question and again, a broader context. it is a very good question and again a broader context When we look at a slide from our presentation with like-for-likes, we will see that, of course, our appetites were greater, but it is the market. when we look at a slide from our presentation with like-for-likes we will see that of course our appetites were greater but it is the market Our teams do their utmost, and we always offer the best possible collections. our teams do their utmost and we always offer the best possible collections The client voted with their decisions. the client voted with their decisions We have our conclusions. we have our conclusions We are entering the autumn season with our homework done and lessons learned. 2023 was another period when we had a lot of inventories and the margins were what they were. we are entering the autumn season with our homework done and lessons learned 2023 was another period when we had a lot of inventories and the margins were what they were The like-for-likes were what they were. the like-for-likes were what they were Reserved is a different brand. reserved is a different brand The first half of the year was actually in the same situation, minus 5% on likes in the first quarter and similarly in the second. the first half of the year was actually in the same situation minus 5% on likes in the first quarter and similarly in the second We know how to do our homework. But number-wise, I would call for looking at 2024 and Sinsay, what quarterly dynamics we had, 11, even 12% in like-for-likes. So quite naturally, this is something that is nearing the average, and this biannual approach is not as pessimistic as this readout for the last quarter might suggest. Let me maybe add on the structure of likes for Sinsay. The women collections have very good likes, and a different group has lower likes. There are questions concerning competitors and whether women collection in Sinsay has poor likes. Well, that's not the case. And since we talk about competitors, how do you evaluate the risk of aggressive strategy of Chinese platforms and their impact on LPP business? And how are you going to compete against these Chinese platforms? I believe that our business model is the best response and reply to that competition. We know how to do our homework. we know how to do our homework But number-wise, I would call for looking at 2024 and Sinsay, what quarterly dynamics we had, 11, even 12% in like-for-likes. but number-wise i would call for looking at 2024 and sinsay what quarterly dynamics we had 11 even 12% in like-for-likes So quite naturally, this is something that is nearing the average, and this biannual approach is not as pessimistic as this readout for the last quarter might suggest. so quite naturally this is something that is nearing the average and this biannual approach is not as pessimistic as this readout for the last quarter might suggest Let me maybe add on the structure of likes for Sinsay. let me maybe add on the structure of likes for sinsay The women collections have very good likes, and a different group has lower likes. the women collections have very good likes and a different group has lower likes There are questions concerning competitors and whether women collection in Sinsay has poor likes. there are questions concerning competitors and whether women collection in sinsay has poor likes Well, that's not the case. well that's not the case And since we talk about competitors, how do you evaluate the risk of aggressive strategy of Chinese platforms and their impact on LPP business? and since we talk about competitors how do you evaluate the risk of aggressive strategy of chinese platforms and their impact on lpp business And how are you going to compete against these Chinese platforms? and how are you going to compete against these chinese platforms I believe that our business model is the best response and reply to that competition. i believe that our business model is the best response and reply to that competition We are present in two channels, offline and online. The client always has a choice to come and see, and they do not need to buy something they've never seen. So we bet on quality. We bet on safety, our application, and security. When we look at our application in the second but last quarter, our application was the top one in terms of the fashion category. Then it was in top two. So those results are improving. We can see that the app is appreciated by the customers. We offer good and fast, quickly delivered collections. So we can say that this is the reply to the competitors. And talking about the cost, this is the third biggest LPP cost, that is performance marketing. That's advertising online. We spend ever less year on year. Versus the internal budget that we've planned, we spend even less. We are present in two channels, offline and online. we are present in two channels offline and online The client always has a choice to come and see, and they do not need to buy something they've never seen. the client always has a choice to come and see and they do not need to buy something they've never seen So we bet on quality. so we bet on quality We bet on safety, our application, and security. we bet on safety our application and security When we look at our application in the second but last quarter, our application was the top one in terms of the fashion category. when we look at our application in the second but last quarter our application was the top one in terms of the fashion category Then it was in top two. then it was in top two So those results are improving. so those results are improving We can see that the app is appreciated by the customers. we can see that the app is appreciated by the customers We offer good and fast, quickly delivered collections. we offer good and fast quickly delivered collections So we can say that this is the reply to the competitors. so we can say that this is the reply to the competitors And talking about the cost, this is the third biggest LPP cost, that is performance marketing. and talking about the cost this is the third biggest lpp cost that is performance marketing That's advertising online. that's advertising online We spend ever less year on year. we spend ever less year on year Versus the internal budget that we've planned, we spend even less. versus the internal budget that we've planned we spend even less So we have quite a reserve here and a lot of tools to sustain this competitive spirit. We always observe our competitors humbly. We treat it as something that makes us perform better. We can see that we have efficient tools that enable us to compete even now. What do you expect when we talk about refinancing and savings? And I can see that the margins, given our scale and this oversubscription that we've commented over 50%, the margins are much better than they were. And versus even monitoring, say, the current reports of other players in the Polish market, those margins are attractive. In terms of a precise estimate of what kind of saving it is, we will leave it to ourselves because, well, the consumption of it will simply be different. There are no two completely comparable years. So we have quite a reserve here and a lot of tools to sustain this competitive spirit. so we have quite a reserve here and a lot of tools to sustain this competitive spirit We always observe our competitors humbly. we always observe our competitors humbly We treat it as something that makes us perform better. we treat it as something that makes us perform better We can see that we have efficient tools that enable us to compete even now. we can see that we have efficient tools that enable us to compete even now What do you expect when we talk about refinancing and savings? what do you expect when we talk about refinancing and savings And I can see that the margins, given our scale and this oversubscription that we've commented over 50%, the margins are much better than they were. and i can see that the margins given our scale and this oversubscription that we've commented over 50% the margins are much better than they were And versus even monitoring, say, the current reports of other players in the Polish market, those margins are attractive. and versus even monitoring say the current reports of other players in the polish market those margins are attractive In terms of a precise estimate of what kind of saving it is, we will leave it to ourselves because, well, the consumption of it will simply be different. in terms of a precise estimate of what kind of saving it is we will leave it to ourselves because well the consumption of it will simply be different There are no two completely comparable years. there are no two completely comparable years We can see that the Sinsay model is working, and there are the flows as we expect. And what's most important is that in this new structure, we have this comfort of three years of current limits that we can flexibly prolong and CapEx that is financing of investment. That's the prospect of five years to come. That gives us a lot of comfort that in our strategy, we can focus on the development of our business. We are safe in terms of our assets. We can pay our dividends. And 21 financial institutions are interested. So that shows that the broadly understood financial market also believes in our model because these amounts and time, they show the scale of this commitment and hope in the development of us as the LPP Group. How about the current situation in the German, U.K., and Ukrainian markets? We can see that the Sinsay model is working, and there are the flows as we expect. we can see that the sinsay model is working and there are the flows as we expect And what's most important is that in this new structure, we have this comfort of three years of current limits that we can flexibly prolong and CapEx that is financing of investment. and what's most important is that in this new structure we have this comfort of three years of current limits that we can flexibly prolong and capex that is financing of investment That's the prospect of five years to come. that's the prospect of five years to come That gives us a lot of comfort that in our strategy, we can focus on the development of our business. that gives us a lot of comfort that in our strategy we can focus on the development of our business We are safe in terms of our assets. we are safe in terms of our assets We can pay our dividends. we can pay our dividends And 21 financial institutions are interested. and 21 financial institutions are interested So that shows that the broadly understood financial market also believes in our model because these amounts and time, they show the scale of this commitment and hope in the development of us as the LPP Group. so that shows that the broadly understood financial market also believes in our model because these amounts and time they show the scale of this commitment and hope in the development of us as the lpp group How about the current situation in the German, U.K., and Ukrainian markets? how about the current situation in the german u.k and ukrainian markets German and UK markets enjoy a very sound situation, to put it briefly. The likes are improving. That's obvious. Starting from 2023 autumn, in the UK, we added new stores. I'm talking about the Reserved brand in Great Britain, in the UK. They've been on the rise. EBIT is not positive there yet, but every quarter, every season is ever better. And starting from the beginning of the year, the likes are double-digit. Similar is the case in Germany. It's a great e-com market as well. When a new Reserved store was open in Oberhausen, we have 18 stores there altogether. I'm looking for confirmation, yes. So there are 18 stores there, and it's just the Reserved brand. In e-commerce, of course, we offer other brands as well. Again, high increases. Post-COVID, we negotiated favorable conditions. German and UK markets enjoy a very sound situation, to put it briefly. german and uk markets enjoy a very sound situation to put it briefly The likes are improving. the likes are improving That's obvious. that's obvious Starting from 2023 autumn, in the UK, we added new stores. starting from 2023 autumn in the uk we added new stores I'm talking about the Reserved brand in Great Britain, in the UK. i'm talking about the reserved brand in great britain in the uk They've been on the rise. they've been on the rise EBIT is not positive there yet, but every quarter, every season is ever better. ebit is not positive there yet but every quarter every season is ever better And starting from the beginning of the year, the likes are double-digit. and starting from the beginning of the year the likes are double-digit Similar is the case in Germany. similar is the case in germany It's a great e-com market as well. it's a great e-com market as well When a new Reserved store was open in Oberhausen, we have 18 stores there altogether. when a new reserved store was open in oberhausen we have 18 stores there altogether I'm looking for confirmation, yes. i'm looking for confirmation yes So there are 18 stores there, and it's just the Reserved brand. so there are 18 stores there and it's just the reserved brand In e-commerce, of course, we offer other brands as well. in e-commerce of course we offer other brands as well Again, high increases. again high increases Post-COVID, we negotiated favorable conditions. post-covid we negotiated favorable conditions So last year, the German company celebrated their 10th anniversary, and we are very happy that last year they proved to double-digit profitability, and it sticks to it. And the third country asked about was Ukraine, right? Yes. And it nicely relates to the question about likes because those who have been with us and follow our detailed data, again, I encourage you to keep a close eye on our investor relations website. Anyhow, we keep developing the Ukrainian market, so it weighs a lot, particularly in Sinsay. And we're talking about sort of normalization year on year, so very high likes last year and now natural drop. So Ukraine is the biggest market with this normalization is really high. After the war, there came a drop. Then was the bounce that was very high, 40%-50%. Now we have a double-digit minus there. So again, that's only natural. So last year, the German company celebrated their 10th anniversary, and we are very happy that last year they proved to double-digit profitability, and it sticks to it. so last year the german company celebrated their 10th anniversary and we are very happy that last year they proved to double-digit profitability and it sticks to it And the third country asked about was Ukraine, right? and the third country asked about was ukraine right Yes. yes And it nicely relates to the question about likes because those who have been with us and follow our detailed data, again, I encourage you to keep a close eye on our investor relations website. and it nicely relates to the question about likes because those who have been with us and follow our detailed data again i encourage you to keep a close eye on our investor relations website Anyhow, we keep developing the Ukrainian market, so it weighs a lot, particularly in Sinsay. anyhow we keep developing the ukrainian market so it weighs a lot particularly in sinsay And we're talking about sort of normalization year on year, so very high likes last year and now natural drop. and we're talking about sort of normalization year on year so very high likes last year and now natural drop So Ukraine is the biggest market with this normalization is really high. so ukraine is the biggest market with this normalization is really high After the war, there came a drop. after the war there came a drop Then was the bounce that was very high, 40%-50%. then was the bounce that was very high 40%-50% Now we have a double-digit minus there. now we have a double-digit minus there So again, that's only natural. so again that's only natural But when we look at the profitability, the Eastern markets are still the most profitable markets in the group. That is why we systematically keep investing there. I mentioned the number of openings. We look at the profitability. We keep on learning. That was the first year of the acceleration of our growth, but we draw conclusions as we go. June showed that we are not afraid to stop or to take a step backwards in order to take two steps ahead after. We are focusing on profitability. That's a natural process, so that's what it is like. For some time, we can observe negative LFL regarding Sinsay. What is the diagnosis, in your opinion, in this situation? And what activities do you plan to improve the situation? I believe a similar situation was already asked. So natural like-for-likes, natural grounds. We start from figures. But when we look at the profitability, the Eastern markets are still the most profitable markets in the group. but when we look at the profitability the eastern markets are still the most profitable markets in the group That is why we systematically keep investing there. that is why we systematically keep investing there I mentioned the number of openings. i mentioned the number of openings We look at the profitability. we look at the profitability We keep on learning. we keep on learning That was the first year of the acceleration of our growth, but we draw conclusions as we go. that was the first year of the acceleration of our growth but we draw conclusions as we go June showed that we are not afraid to stop or to take a step backwards in order to take two steps ahead after. june showed that we are not afraid to stop or to take a step backwards in order to take two steps ahead after We are focusing on profitability. we are focusing on profitability That's a natural process, so that's what it is like. that's a natural process so that's what it is like For some time, we can observe negative LFL regarding Sinsay. for some time we can observe negative lfl regarding sinsay What is the diagnosis, in your opinion, in this situation? what is the diagnosis in your opinion in this situation And what activities do you plan to improve the situation? and what activities do you plan to improve the situation I believe a similar situation was already asked. i believe a similar situation was already asked So natural like-for-likes, natural grounds. so natural like-for-likes natural grounds We start from figures. we start from figures But of course, the appetite is much, much higher. We learn from the past. New project, new season, new hope. So we can do the best work, but the client is going to actually come to the store and buy. So we discuss that good like-for-likes are grounds for the new motivation program for our teams, but I don't think they need additional motivation. We want to provide best collections for our clients. So natural motivation is the main factor. This is what we believe we can do, and the history shows we can. Expansion, Uzbekistan, Kazakhstan, these are new markets with new stores you launched over there. Do you plan to open in new stores around Central Asia or perhaps other markets are also the topic? Central Asia, yes. We opened almost all markets. In Moldova, we are also there. But of course, the appetite is much, much higher. but of course the appetite is much much higher We learn from the past. we learn from the past New project, new season, new hope. new project new season new hope So we can do the best work, but the client is going to actually come to the store and buy. so we can do the best work but the client is going to actually come to the store and buy So we discuss that good like-for-likes are grounds for the new motivation program for our teams, but I don't think they need additional motivation. so we discuss that good like-for-likes are grounds for the new motivation program for our teams but i don't think they need additional motivation We want to provide best collections for our clients. we want to provide best collections for our clients So natural motivation is the main factor. so natural motivation is the main factor This is what we believe we can do, and the history shows we can. this is what we believe we can do and the history shows we can Expansion, Uzbekistan, Kazakhstan, these are new markets with new stores you launched over there. expansion uzbekistan kazakhstan these are new markets with new stores you launched over there Do you plan to open in new stores around Central Asia or perhaps other markets are also the topic? do you plan to open in new stores around central asia or perhaps other markets are also the topic Central Asia, yes. central asia yes We opened almost all markets. we opened almost all markets In Moldova, we are also there. in moldova we are also there Sorry, the end of the year is very intensive as for the financial aspect. So this was our debut in Moldova. This year was a record year as for the opening of stores in new markets. So as for the launch, this is all now we are building the scale in particular markets. So we do not plan to launch new stores and enter new markets. So this slowdown regarding Czechia and Slovakia focuses our attention on the new markets. So we are going to look for the potential. So 950 Sinsay stores is going to be delivered. In the fourth quarter, what impact do we have from higher winter temperatures on the sales? We are looking at the calendar. We want to be fair and very transparent. So we are the last to look for excuses as for the temperature. Sorry, the end of the year is very intensive as for the financial aspect. sorry the end of the year is very intensive as for the financial aspect So this was our debut in Moldova. so this was our debut in moldova This year was a record year as for the opening of stores in new markets. this year was a record year as for the opening of stores in new markets So as for the launch, this is all now we are building the scale in particular markets. so as for the launch this is all now we are building the scale in particular markets So we do not plan to launch new stores and enter new markets. so we do not plan to launch new stores and enter new markets So this slowdown regarding Czechia and Slovakia focuses our attention on the new markets. so this slowdown regarding czechia and slovakia focuses our attention on the new markets So we are going to look for the potential. so we are going to look for the potential So 950 Sinsay stores is going to be delivered. so 950 sinsay stores is going to be delivered In the fourth quarter, what impact do we have from higher winter temperatures on the sales? in the fourth quarter what impact do we have from higher winter temperatures on the sales We are looking at the calendar. we are looking at the calendar We want to be fair and very transparent. we want to be fair and very transparent So we are the last to look for excuses as for the temperature. so we are the last to look for excuses as for the temperature I remember two times during my term of office when September was really difficult because the temperatures were really high, and the demand shifted into October. That was 2024 and 2023. In May this year, it was the coldest May ever, so the first week of June was really difficult. And yes, these were the objective reasons for that. Now, higher temperatures. Yes, as Magda presented, the dynamics are improving. That was a long weekend. The clients were probably waiting for the Black Week. So this is our diagnosis. So the trend is improving. Like-for-likes from negative are going to positive numbers from October, November to December. So let's not talk about temperatures now. We have still working Sundays, Christmas time, and New Year's Eve. So let's wait for the final results. What are the plans regarding the marketplace? We've been analyzing all options regarding e-commerce. I remember two times during my term of office when September was really difficult because the temperatures were really high, and the demand shifted into October. i remember two times during my term of office when september was really difficult because the temperatures were really high and the demand shifted into october That was 2024 and 2023. that was 2024 and 2023 In May this year, it was the coldest May ever, so the first week of June was really difficult. in may this year it was the coldest may ever so the first week of june was really difficult And yes, these were the objective reasons for that. and yes these were the objective reasons for that Now, higher temperatures. now higher temperatures Yes, as Magda presented, the dynamics are improving. yes as magda presented the dynamics are improving That was a long weekend. that was a long weekend The clients were probably waiting for the Black Week. the clients were probably waiting for the black week So this is our diagnosis. so this is our diagnosis So the trend is improving. so the trend is improving Like-for-likes from negative are going to positive numbers from October, November to December. like-for-likes from negative are going to positive numbers from october november to december So let's not talk about temperatures now. so let's not talk about temperatures now We have still working Sundays, Christmas time, and New Year's Eve. we have still working sundays christmas time and new year's eve So let's wait for the final results. so let's wait for the final results What are the plans regarding the marketplace? what are the plans regarding the marketplace We've been analyzing all options regarding e-commerce. we've been analyzing all options regarding e-commerce The app is working really well. Many clients are drawn by the Sinsay app. So this is 30% of business with e-commerce. So this is a really strong instrument, and this marketplace is a natural step. But I believe that this is too early now to talk about it. We are going to analyze that. So once we have precise information, we will go back during our regular quarterly meetings. The marketing level, what was the marketing level regarding the guidelines for 2029 and 2026? That was 9%. When we look at guidance 2026, 2027, you believe operational effectiveness is going to improve. In what areas do you plan the improvement and whether this is the result of opening new stores? A very good question. With a partial answer, yes. This is affected by a larger percentage of Sinsay. The app is working really well. the app is working really well Many clients are drawn by the Sinsay app. many clients are drawn by the sinsay app So this is 30% of business with e-commerce. so this is 30% of business with e-commerce So this is a really strong instrument, and this marketplace is a natural step. so this is a really strong instrument and this marketplace is a natural step But I believe that this is too early now to talk about it. but i believe that this is too early now to talk about it We are going to analyze that. we are going to analyze that So once we have precise information, we will go back during our regular quarterly meetings. so once we have precise information we will go back during our regular quarterly meetings The marketing level, what was the marketing level regarding the guidelines for 2029 and 2026? the marketing level what was the marketing level regarding the guidelines for 2029 and 2026 That was 9%. that was 9% When we look at guidance 2026, 2027, you believe operational effectiveness is going to improve. when we look at guidance 2026 2027 you believe operational effectiveness is going to improve In what areas do you plan the improvement and whether this is the result of opening new stores? in what areas do you plan the improvement and whether this is the result of opening new stores A very good question. a very good question With a partial answer, yes. with a partial answer yes This is affected by a larger percentage of Sinsay. this is affected by a larger percentage of sinsay So the gross margin is going to drop, but Sinsay is lower. As for the CapEx, it's not that expensive as other markets. It's improving our leverage. But the area where we can see positive impact looking at the next two years, this is logistics. So more investment we can see after this sample in Bydgoszcz, our biggest e-commerce warehouse, 100,000 square meters. It is working perfectly on the largest scale. So the cost regarding logistics, this is the second group of our cost. So that was a really small change that is generating a significant potential. So what is behind that? Can you tell what was the guidance for 2026 regarding the level of sales within the whole group, but also regarding the Sinsay brand? We have ambitious targets, but in our model, these are single-digit or lower amounts within single-digit figures. So the gross margin is going to drop, but Sinsay is lower. so the gross margin is going to drop but sinsay is lower As for the CapEx, it's not that expensive as other markets. as for the capex it's not that expensive as other markets It's improving our leverage. it's improving our leverage But the area where we can see positive impact looking at the next two years, this is logistics. but the area where we can see positive impact looking at the next two years this is logistics So more investment we can see after this sample in Bydgoszcz, our biggest e-commerce warehouse, 100,000 square meters. so more investment we can see after this sample in bydgoszcz our biggest e-commerce warehouse 100,000 square meters It is working perfectly on the largest scale. it is working perfectly on the largest scale So the cost regarding logistics, this is the second group of our cost. so the cost regarding logistics this is the second group of our cost So that was a really small change that is generating a significant potential. so that was a really small change that is generating a significant potential So what is behind that? so what is behind that Can you tell what was the guidance for 2026 regarding the level of sales within the whole group, but also regarding the Sinsay brand? can you tell what was the guidance for 2026 regarding the level of sales within the whole group but also regarding the sinsay brand We have ambitious targets, but in our model, these are single-digit or lower amounts within single-digit figures. we have ambitious targets but in our model these are single-digit or lower amounts within single-digit figures You decided not to enter towns smaller than 30,000 inhabitants. Do you believe this is related to the Polish market? No. That was a comment regarding Ukraine from the logical point of view. So the data for smaller towns, well, the situation regarding the war is difficult. We have doubtful quality regarding the data. So if we have a lower number of citizens in smaller towns, so we want to develop, but we want to be also profitable. So this is our cautious approach to that. On a long-term basis, when we look at the logic, so do we want the company to grow 20% year-over-year? So don't we expect positive results from this operational leverage? Or perhaps Sinsay is less profitable than other brands. So maybe this is a side effect of this development. Well, here, this is also a good question. We have our internal targets. You decided not to enter towns smaller than 30,000 inhabitants. you decided not to enter towns smaller than 30,000 inhabitants Do you believe this is related to the Polish market? do you believe this is related to the polish market No. no That was a comment regarding Ukraine from the logical point of view. that was a comment regarding ukraine from the logical point of view So the data for smaller towns, well, the situation regarding the war is difficult. so the data for smaller towns well the situation regarding the war is difficult We have doubtful quality regarding the data. we have doubtful quality regarding the data So if we have a lower number of citizens in smaller towns, so we want to develop, but we want to be also profitable. so if we have a lower number of citizens in smaller towns so we want to develop but we want to be also profitable So this is our cautious approach to that. so this is our cautious approach to that On a long-term basis, when we look at the logic, so do we want the company to grow 20% year- over- year? on a long-term basis when we look at the logic so do we want the company to grow 20% year- over- year So don't we expect positive results from this operational leverage? so don't we expect positive results from this operational leverage Or perhaps Sinsay is less profitable than other brands. or perhaps sinsay is less profitable than other brands So maybe this is a side effect of this development. so maybe this is a side effect of this development Well, here, this is also a good question. well here this is also a good question We have our internal targets. we have our internal targets We also have guidance. So this year taught us a lot. We are more humble. So that was a really safe level that we can deliver. Internally, our appetite is much larger, of course. This leverage is at the level of one, so close to EBIT, so zero plus, we would say. But we believe that it's going to be there. So we have these brackets we want to operate in. So the top or low level of the margin. We believe that with such approach, this margin will be noticeable, more noticeable. So within a two-year perspective, we are going to report that on a regular basis. So you will then be able to update with more recent information. Are you planning to have more write-offs regarding the Russian business? No. This PLN 800 million in the backup, we also have information regarding that. So this is the total write-off. We also have guidance. we also have guidance So this year taught us a lot. so this year taught us a lot We are more humble. we are more humble So that was a really safe level that we can deliver. so that was a really safe level that we can deliver Internally, our appetite is much larger, of course. internally our appetite is much larger of course This leverage is at the level of one, so close to EBIT, so zero plus, we would say. this leverage is at the level of one so close to ebit so zero plus we would say But we believe that it's going to be there. but we believe that it's going to be there So we have these brackets we want to operate in. so we have these brackets we want to operate in So the top or low level of the margin. so the top or low level of the margin We believe that with such approach, this margin will be noticeable, more noticeable. we believe that with such approach this margin will be noticeable more noticeable So within a two-year perspective, we are going to report that on a regular basis. so within a two-year perspective we are going to report that on a regular basis So you will then be able to update with more recent information. so you will then be able to update with more recent information Are you planning to have more write-offs regarding the Russian business? are you planning to have more write-offs regarding the russian business No. no This PLN 800 million in the backup, we also have information regarding that. this pln 800 million in the backup we also have information regarding that So this is the total write-off. so this is the total write-off As a company, we are going to fight with the board as well. We are in close contact. We are going to fight back. But for now, to make it easier for us for a discussion, we want to focus on business these days. So we don't want to go back to it every quarter. So this is a total write-off. What happens later on, that would be a plus result. So we just wanted to address this topic and talk about LFLs, improvement, growth, investments, and new markets. What markets, in your opinion, are the weakest after the third and fourth quarter? I would like to repeat what I said before. Czechia, Slovakia, and Hungary, and Ukraine as well. We can assess that from the perspective of like-for-likes with least dynamics. As a company, we are going to fight with the board as well. as a company we are going to fight with the board as well We are in close contact. we are in close contact We are going to fight back. we are going to fight back But for now, to make it easier for us for a discussion, we want to focus on business these days. but for now to make it easier for us for a discussion we want to focus on business these days So we don't want to go back to it every quarter. so we don't want to go back to it every quarter So this is a total write-off. so this is a total write-off What happens later on, that would be a plus result. what happens later on that would be a plus result So we just wanted to address this topic and talk about LFLs, improvement, growth, investments, and new markets. so we just wanted to address this topic and talk about lfls improvement growth investments and new markets What markets, in your opinion, are the weakest after the third and fourth quarter? what markets in your opinion are the weakest after the third and fourth quarter I would like to repeat what I said before. i would like to repeat what i said before Czechia, Slovakia, and Hungary, and Ukraine as well. czechia slovakia and hungary and ukraine as well We can assess that from the perspective of like-for-likes with least dynamics. we can assess that from the perspective of like-for-likes with least dynamics Ukraine, of course, when the rates and the bombing is increasing, then we also have drops in the sales. Estonia, it's a small market. I also mentioned that before. We can see that in like-for-likes. The governmental priority is to focus on the fiscal approach and the taxation. This result, this is the situation. What about any potential attacks on your sites in Ukraine? We cannot predict that. We know the operational side. As for our stock, we don't have just one good location. We keep our stock in different locations. So we have a diversity in our approach. This is what we've changed after recent events. Does the financing make it possible for takeovers? Or maybe you are planning to approach that differently? Refinancing allows us to do much more. Ukraine, of course, when the rates and the bombing is increasing, then we also have drops in the sales. ukraine of course when the rates and the bombing is increasing then we also have drops in the sales Estonia, it's a small market. estonia it's a small market I also mentioned that before. i also mentioned that before We can see that in like-for-likes. we can see that in like-for-likes The governmental priority is to focus on the fiscal approach and the taxation. the governmental priority is to focus on the fiscal approach and the taxation This result, this is the situation. this result this is the situation What about any potential attacks on your sites in Ukraine? what about any potential attacks on your sites in ukraine We cannot predict that. we cannot predict that We know the operational side. we know the operational side As for our stock, we don't have just one good location. as for our stock we don't have just one good location We keep our stock in different locations. we keep our stock in different locations So we have a diversity in our approach. so we have a diversity in our approach This is what we've changed after recent events. this is what we've changed after recent events Does the financing make it possible for takeovers? does the financing make it possible for takeovers Or maybe you are planning to approach that differently? or maybe you are planning to approach that differently Refinancing allows us to do much more. refinancing allows us to do much more But for now, as for allocation of the capital, when we refer to CapEx, these are investment, expenditure, logistics, Sinsay, new stores, and dividend paid to our shareholders. We don't have such M&A ideas. We can see that in 2025, we have a lot of data. We need to be flexible in our reaction. So we need to do business. Maybe another comment. We also have such topics or such offers regarding M&A. But as LPP, we are generating bigger profits over weekends. So this is not like the scale we would like to look for. We focus on our organic growth. Another two questions refer to the prospects regarding Europe or Great Britain. Do you believe that Sinsay expansion over this market is possible? Or do you plan a significant growth, better growth of Reserved brand in these markets? As for the first question, Sinsay in the West? No. But for now, as for allocation of the capital, when we refer to CapEx, these are investment, expenditure, logistics, Sinsay, new stores, and dividend paid to our shareholders. but for now as for allocation of the capital when we refer to capex these are investment expenditure logistics sinsay new stores and dividend paid to our shareholders We don't have such M&A ideas. we don't have such m&a ideas We can see that in 2025, we have a lot of data. we can see that in 2025 we have a lot of data We need to be flexible in our reaction. we need to be flexible in our reaction So we need to do business. so we need to do business Maybe another comment. maybe another comment We also have such topics or such offers regarding M&A. we also have such topics or such offers regarding m&a But as LPP, we are generating bigger profits over weekends. but as lpp we are generating bigger profits over weekends So this is not like the scale we would like to look for. so this is not like the scale we would like to look for We focus on our organic growth. we focus on our organic growth Another two questions refer to the prospects regarding Europe or Great Britain. another two questions refer to the prospects regarding europe or great britain Do you believe that Sinsay expansion over this market is possible? do you believe that sinsay expansion over this market is possible Or do you plan a significant growth, better growth of Reserved brand in these markets? or do you plan a significant growth better growth of reserved brand in these markets As for the first question, Sinsay in the West? as for the first question sinsay in the west No. no Not that we close our options for us, but we want to focus on the quality. We observe the market. We can see the history as Marek, our CEO, is looking. We draw conclusions. Other companies went there, did wrong, and had to close business and went bankrupt. So the Sinsay model is designed to be effective regarding OPEX in the West. It's difficult to look for such cost-related effectiveness so that the workforce and lower Capex. So we focus on Central Europe, Eastern Europe, Central Asia, Southern Europe. This is what we presented in the slides. So these are the regions that we really focus on with our activities. We can see that we have really good returns on investments, 12, 13, 16 months. So below our benchmark, much, much faster. And this is what we focus on. Not that we close our options for us, but we want to focus on the quality. not that we close our options for us but we want to focus on the quality We observe the market. we observe the market We can see the history as Marek, our CEO, is looking. we can see the history as marek our ceo is looking We draw conclusions. we draw conclusions Other companies went there, did wrong, and had to close business and went bankrupt. other companies went there did wrong and had to close business and went bankrupt So the Sinsay model is designed to be effective regarding OPEX in the West. so the sinsay model is designed to be effective regarding opex in the west It's difficult to look for such cost-related effectiveness so that the workforce and lower Capex. it's difficult to look for such cost-related effectiveness so that the workforce and lower capex So we focus on Central Europe, Eastern Europe, Central Asia, Southern Europe. so we focus on central europe eastern europe central asia southern europe This is what we presented in the slides. this is what we presented in the slides So these are the regions that we really focus on with our activities. so these are the regions that we really focus on with our activities We can see that we have really good returns on investments, 12, 13, 16 months. we can see that we have really good returns on investments 12 13 16 months So below our benchmark, much, much faster. so below our benchmark much much faster And this is what we focus on. and this is what we focus on So Sinsay and Western Europe, this is not the direction that we want to follow these days. As for Reserved, another brand commenting much wider, as I said, with the strategy, with larger space, Reserved needs at least 16,000, 1,600 meters. It's difficult to find in Western Europe, referring to question regarding Germany or U.K. So in U.K., we needed 10 years for this profitability. In Germany, we are still working on it. So when there is a situation favorable for investment, we are going to go for it. But when we have a good location, we are going to consider that. So like the new opening in Oberhausen, this proves that. But whether this is the scale, well, right now, we don't see this potential regarding the size of the stores. We focus on the growth of Reserved, basically in online. We can see a significant potential. So Sinsay and Western Europe, this is not the direction that we want to follow these days. so sinsay and western europe this is not the direction that we want to follow these days As for Reserved, another brand commenting much wider, as I said, with the strategy, with larger space, Reserved needs at least 16,000, 1,600 meters. as for reserved another brand commenting much wider as i said with the strategy with larger space reserved needs at least 16,000 1,600 meters It's difficult to find in Western Europe, referring to question regarding Germany or U.K. it's difficult to find in western europe referring to question regarding germany or u.k So in U.K., we needed 10 years for this profitability. so in u.k we needed 10 years for this profitability In Germany, we are still working on it. in germany we are still working on it So when there is a situation favorable for investment, we are going to go for it. so when there is a situation favorable for investment we are going to go for it But when we have a good location, we are going to consider that. but when we have a good location we are going to consider that So like the new opening in Oberhausen, this proves that. so like the new opening in oberhausen this proves that But whether this is the scale, well, right now, we don't see this potential regarding the size of the stores. but whether this is the scale well right now we don't see this potential regarding the size of the stores We focus on the growth of Reserved, basically in online. we focus on the growth of reserved basically in online We can see a significant potential. we can see a significant potential What is the payback period from investment in robotization? Up to two years, and the last question, we answered that, but we want whether this write-off from Russia is going to affect the payment of the dividend. A very good question. Yes, we started with the dividend, so I believe this is the last question regarding Q&A, so we are going to complete with dividend as well. No, it is not going to affect the dividend. As we communicated, we have resources, but the board recommendation and the resolution is going to be adopted for the future, but business-wise, the write-off was a non-cash write-off, so the reported profit was just adjusted by this write-off. You can go back to the backup, and clear net profit is going to be grounds for the payment of dividends. The dividend was on 70% of net profit. Nothing changes here. What is the payback period from investment in robotization? what is the payback period from investment in robotization Up to two years, and the last question, we answered that, but we want whether this write-off from Russia is going to affect the payment of the dividend. up to two years and the last question we answered that but we want whether this write-off from russia is going to affect the payment of the dividend A very good question. a very good question Yes, we started with the dividend, so I believe this is the last question regarding Q&A, so we are going to complete with dividend as well. yes we started with the dividend so i believe this is the last question regarding q&a so we are going to complete with dividend as well No, it is not going to affect the dividend. no it is not going to affect the dividend As we communicated, we have resources, but the board recommendation and the resolution is going to be adopted for the future, but business-wise, the write-off was a non-cash write-off, so the reported profit was just adjusted by this write-off. as we communicated we have resources but the board recommendation and the resolution is going to be adopted for the future but business-wise the write-off was a non-cash write-off so the reported profit was just adjusted by this write-off You can go back to the backup, and clear net profit is going to be grounds for the payment of dividends. you can go back to the backup and clear net profit is going to be grounds for the payment of dividends The dividend was on 70% of net profit. the dividend was on 70% of net profit Nothing changes here. nothing changes here So this is the level. We have resources. We have a really comfortable situation. 1.1 leverage, a very good level. So to reiterate about it, no, it is not going to affect the dividend payout, sharing the profits with you. After nine months, this prospect is really good. So this is the level. so this is the level We have resources. we have resources We have a really comfortable situation. 1.1 leverage, a very good level. we have a really comfortable situation 1.1 leverage a very good level So to reiterate about it, no, it is not going to affect the dividend payout, sharing the profits with you. so to reiterate about it no it is not going to affect the dividend payout sharing the profits with you After nine months, this prospect is really good. after nine months this prospect is really good

Speaker 2: I'll close on this optimistic note that we are closing our meeting. Since this is the last conference this year, on behalf of the entire LPP Group, we would like to wish you first and foremost a very healthy, jolly Merry Christmas. May this season be the period of relief from everyday struggles. And for next year, we wish you all the best and making your dreams and targets come true, both in your private and business lives. Thank you very much for today. And see you at another result conference that we are planning for spring. I'll close on this optimistic note that we are closing our meeting. i'll close on this optimistic note that we are closing our meeting Since this is the last conference this year, on behalf of the entire LPP Group, we would like to wish you first and foremost a very healthy, jolly Merry Christmas. since this is the last conference this year on behalf of the entire lpp group we would like to wish you first and foremost a very healthy jolly merry christmas May this season be the period of relief from everyday struggles. may this season be the period of relief from everyday struggles And for next year, we wish you all the best and making your dreams and targets come true, both in your private and business lives. and for next year we wish you all the best and making your dreams and targets come true both in your private and business lives Thank you very much for today. thank you very much for today And see you at another result conference that we are planning for spring. and see you at another result conference that we are planning for spring Thank you very much. Goodbye. Thank you very much. thank you very much Goodbye. goodbye