LPP S.A. — Call Transcript 2025

Welcome, everybody. My name is Magdalena Kopaczewska, and I represent Investor Relations Unit in LPP. Marcin Bójko, CFO and Board Member of LPP, is here with me. Hi, and together we would like to invite you as the prospective. All in all, we are satisfied that this dynamics was positive, particularly in the Reserved brand. These were two-digit like-for-likes. In terms of e-com sales, we generated PLN 1.4 billion in the second quarter, 16% growth, and in currencies, constant currencies, of course, we were planning 22%. But in this channel, again, this difficult market showed its face with lower traffic. In the net, we decided to optimize the performance marketing costs, so the purchases of likes or clicks in the net. So maybe we did not. At 0.6 percentage point, that's the greatest share of the Sinsay brand in the entirety of our offer, and the remaining context is active managing of gross margin. What does that mean? Those of us who are with us regularly might remember that in June, a quarter ago, we announced that the plan for this year was 1,500 openings, but we bet on quality. We don't want to dilute profitability, and we parked the so-called mini concept for further analysis. That translates into the reduction of the number of openings. But what it involves from the operational point of view is that in 2025, we entered with a greater stock for the new openings. Greater stock, so that means that we had greater volume of apparel to be sold. In order not to stay with this stock in the Sinsay brand, our sales team actively managed this balance between the volume sold and the percentage margin. We've been operating at a lower margin recently, but at the end of the day, 54% stable level, so much higher than still back in 2023. Somewhat lower than last year, but we are moving on to the second half of the year with more arguments that we are going to talk about as the presentation progresses. Again, a good quarter, we did what was there to be done. Certainly, more arguments are appearing already right now. The third operational business leverage that we have an impact on are operational costs. We are particularly happy about this area because 2024 was the year of building up our capabilities towards accelerated growth. When we look at the bar chart, the cost per meter was around PLN 300- PLN 320 per square meter, but since the first quarter, these costs visibly decreased. This is the efficiency that we are aiming at rigorously approaching the control of costs. Where have we managed to reach the greatest potentials of cost efficiencies? Mostly what we built, the hinterland that we needed in order to deliver the pipeline openings, so we've got leasing, we've got investment teams, and the performance marketing we've mentioned. Last year, in the second quarter, we spent around 10% for advertisement in the internet related to the revenue generated in the internet, but then it dropped to just 8%, which is a visible saving. The situation of the consumer returned to the normal level in the second half of June, and in July, we defroze the spendings, but they remain at the more or less the same level now. And the third area that contributed to the decrease of cost is logistics. Here, the greatest work was done. Last year, we launched a new warehouse in Romania, a new one in Bydgoszcz. We had many one-time costs. These processes had to standardize, normalize this curve of learning, acquired the proper shape, and now we can already enjoy these efficiencies. What we can see in CapEx, what we communicated within strategy this year and next year are the years of considerable investments in logistics. Logistics, not only in terms of expanding our warehouse capacity, but also robotic solutions that will translate into those great savings in OpEx. In the second quarter, in our results, we had two events, single-time, one-time events, and we will discuss them one by one. Looking at the left-hand side of the slide, warehouse fire in Romania, that was one location in our operational systems, in our operations. We divided it into two parts, DC and a smaller part, FC, so the one for handling internet orders. And the final amount that we lost in the remaining operational assets as losses is PLN 351 million, including PLN 293 million working assets. That's what we lost in terms of the actual apparel, but the rest is the warehouse with its equipment, with its fitting, including the robotic solutions, unfortunately. This is what we owned, and so that's all the value of the losses. But recently, we got from the main co-insurer a decision about accepting responsibility for this event and positive recommendation of the advance payment payout. So on this basis, it was clear to us that in remaining operating revenue, we should budget a similar amount. So in PLN, the impact of this event is neutral. And this is something that closes this part concerning our assets, but to give you a broader comment, the other part of our insurance covered the so-called business interruption. And in this area, we are going to now assess the margin lost on the stock lost, and you can see the bullet above showing the value of it, plus additional costs. Starting from the end of June, we work in a sub-optimal level. A lot of orders related with Romania, of course, transported from Poland, which increases the cost of distribution, all the cost of renting out additional floor area. This is also part of business interruption. We have nine months to sort it all out, so we monitor additional costs as we go, and we notify the insurer. Once this period is over, the time will come to sum it all up and also to settle the accounts within our insurance policy. So that's the first event, and in our results, we also have another one. And this is related with the update of the balance receivables after disposal of Russian business. And here, just to remind you, the context in May 2022, we divested the business in Russia, and the transition period was envisaged at four years. We shortened it to two years. So at the end of January, that period was closed, and the Russian investor took over what was there to be taken over. And our balance notes it nearly PLN 300 million for the sales of stores in Russia and nearly 600 was the receivables for the stock sold there within the transitory period as envisaged in the contract. So taking at it from the point of view of the first half of the year, in the first quarter, we didn't see any payments coming. So that was a delay versus the schedule. But starting from July, we can see weekly payments coming in a fixed amount every week. By today, we've been receiving them regularly, but that's slower than forecasted at the end of the previous year. So on analyzing it all with a Russian company, because this company is in debt, so when we made a realistic approach to the possibility of them paying back, the schedule that was supposed to close in mid-2026 was prolonged until mid-2029. Now, the 30 million that we can see in the first bullet on the right-hand side, this is the result of it and calculating the value of money in time. So that's what was written off. So this amount in the balance sheet will be lower, but this is something that, of course, burdens our result in the second quarter. And now extrapolating these flows a bit, again, we took a cautious approach to the other stream of payments, namely those for the shares in the company or for the stores sold. And again, here, just to remind you, in December 2023, we got the first installment. In December 2024, we got the second one. Now, in December this year and the following year, we were supposed to get the third and the fourth one, the last one, $47.5 million each, but seeing what delays we have in this particular stream of payment for what was sold, again, we decided to be cautious about that and again prolong the repayment schedule concerning this part, and again, the same discount approach means that we see -$35 million burdening us this year. We don't know whether this will materialize. As I said, by the end of December, there is the deadline for this payment to come in, but we want our report to be conservative and reflect as transparently as possible what happens in the business. Summing up all the components of this basic business that we have impact on, so income, margin, and OPEX, again, the results of the second quarter look positive. EBIT nearly, you can see it on the left-hand side, and EBIT was around PLN 700 million net, nearly PLN 500 million. The profit grew year on year in those categories. Now, when you look at the margins, so the clouds below the bars, you can see that despite those one-off events, the margins, practically speaking, are only slightly lower than last year. In the scale of the entire half the year, the season spring-summer, we closed with even better dynamics. EBITDA, EBIT, and net profit grew by double digits and over PLN 1.2 billion EBITDA for the first half is a very nice result, comparable profitability levels. Now, we are entering the second half of the year with greater optimism, believing that things will only look up. This is all from us for the financial results. Let's look at the secured inventory. As I mentioned, with the margin, our inventory is going to grow with the development of the network. These values at the end of the second quarter, we can see PLN 5.2 billion. It is going to grow, but we, as the management of the company, we want these values regarding the inventories not to grow that much, and here, in this short-term period, 1,819, 1,800, 1,800, this is the goal. I believe that we need two or three quarters. So in 2026, we should be able to control the inventory. The structure here is high quality. It is dedicated for the new stores being open. So we are going to manage the inventory so that in the short perspective, we can go back to our short-term optimal solutions. Investment expenditure over PLN 1.2 billion. So these are simple figures we've been showing you already together with our development based on new stores of Sinsay. The expenditure is the highest, almost PLN 380 million in the second quarter. As I mentioned, this year and the next year involves investments in logistics, PLN 0.5 billion. That was the first year in terms of investments. And the new warehouse capacity, 20%. So over one-fifth, these are new solutions regarding robotics, providing us the optimization of OPEX. The cost of one piece in the warehouse in Bydgoszcz dropped 2.5x. This solution in the second quarter was not fully operational. From September, we have full capacities over there. So we believe that the yield is going to be much, much better. Our investment is also perceived with safe debt level. So the leverage here, 1.3. This is a very good result. This is all about the financial aspects. This is the end of September, so we should look at what is happening in this season. The beginning of the third quarter, this is Back to School period. So you can see here, so that was a strong Back to School period. When we look at these blue boxes, the increase in omnichannel, so in stationary shops, this is 35% from mid-August till the first week of September, in online 40%, offline 33%. So this was the period of lower sales, so our dynamics was twice as good. So we are going back to good results. The weather in recent years was different. This year, however, it was a totally different season. So this Back to School period was clearly visible in our results. When we look at the outlook for the third quarter, from the first August till the end of September, we can see 22% year-on-year increase in sales. Positive response as for the autumn-winter collection in all the brands, Reserved, Cropp, House, Mohito. As for the development, from 200 to 200 new stores, this is what we plan for the third quarter, 25. And good information, at the end of October, dividend payment at the end of April. That was the first part, over 600 million PLN. And the second part is going to be paid out at the end of the third quarter. Now, the targets for 2025, summing up the quarters, we can see in the middle column, the first half of the year actuals. Looking at the top PLN 10.5 billion, these are sales from core business, an increase in offline plus 90% and online 20%. So these are our goals, and these are the results. As for the sales, we are in the lower range of our dynamics. Looking from the perspective of the second quarter, we are happy at the end of the day. When we look at the seasons and the second season is much stronger. We have 50% of sales generated in the second season, so we are happy about our goal. After the first half of the year, when we had some challenges ahead of us, the margin, EBITDA, and net margin are at the top levels according to our guidance. So we enter the second half of the year. We had Back to School period. Now, Black Week. This is a strong retail sales and Christmas. So the periods for generating good margin is ahead of us, so we will have a few. But we are happy about the goals that we want to achieve. So when we meet one more time with you at the end of the year around December, so I believe before Christmas, we will be able to sum up the results from the third quarter, and we will be able to give you the results and increase the guidance. This is all from us for the financial results, so we can move on quickly to Q&A. First question refers to a margin and what is the margin that the company expects in the third quarter. What are the current margins that we are selling products right now? And how about the low rate of exchange dollar to zloty and how this is going to affect the third quarter? Thank you for the question. It's a very good one. Yes. Macro is helping us. The collections in the first quarter, that was four zloty in terms of rates of exchange, then we will have 3.7. So it's still some potential ahead of us. We will see what this is going to be. We haven't updated our guidance. We need to observe the situation with gross margin or with inventories. We need to actively manage our margin in Sinsay brand to manage the inventories. We cannot just stay and leave that for the next quarters. So we still have time to manage the stock. And I believe that after the third quarter, we will have more information in Sinsay brand, so the majority of our business. We will not comment, so probably we will just need to touch upon this exchange rate. The level 54, 53, 54 in gross margin. So what are the grounds for it? Yes, we agree that there is some upside here, but with macro that is favorable for us, we want to see how this is going to work with the discounts with such significant inventories that we have. Yes, I agree when you look at it from the summary point of view, there is more optimism in there, but let's wait and we will see that. In the meantime, we will have a lot of meetings. We communicate with the market. So if we can see the results and the situation going as per our forecast, then it is going to be good. In August, we also higher margin in August. In September, it continues. It's a bit higher even in September, but let's wait. So please be patient until the end of December. Then third quarter, like-for-likes. What were the like-for-likes at the beginning of the third quarter? It was closer to 10% or 3%-4%. I think the highest it was House and Reserved, very high, around 20%. But here, I would also give you a broader context for that as for like-for-likes. 3%-4%, it is not really impressive. We want 5% or 7%, but when you look at two-year like-for-likes, then we can see this is really 11%. Sinsay brand last year generated really high like-for-like sales. Now it is stabilizing. I know that with every conference, I keep repeating that, but this is a very good context not to look at it from the perspective of only short-term period, but a longer perspective. Another question refers to a comment regarding the write-offs and receivables from the agents. What is the best case scenario here? The worst case scenario, sorry. So maximum write-off would be worst, but we haven't seen any indications definitely that the repayments are slower. But please believe me that as the management of the company and as the company, we take care about the interest of our stakeholders. So we analyze the situation and we exchange data with the Russian company. So we've been waiting till the last day as for the impact and figures. Writing off almost PLN 1.9 billion from the balance sheet seems easy, but we try to look at it from a broader context, how this can affect a motivation in recovering these resources. So in the interest of our shareholders, it would be best to do it this way as I presented. It seems that this repayment for the goods is very conservative, and I wouldn't expect in the nearest future any additional changes. But as I mentioned, as for the repayments for the shares, we look at it and we decided for the cautious approach. We will see what the situation is going to look like in December, and this is the best information that we can provide today. And also Russian receivables, another question, what was the expected as for the third repayment in December? $47.5 million. $5 million. Now we move on to the question about e-commerce platform. Are you working on the new e-commerce platform? If yes, when do you plan to launch it? Yes, there was a lot of press information and we had a lot of questions regarding this topic. Yes, looking at the strength of e-commerce, 14.5% as for the dynamic growth, this number is lower than what we expected. When we look at online players and broader market and the competition, 14% plus 5%, that was twice quicker development as others, and we did much better, and LPP and e-commerce is strong as for Sinsay brand, our driving force. The apps are the most frequently downloaded app. We can see that this platform you are asking about is a natural following step. We analyze everything, but for now, this is too early. When we have more information, we will go back to this topic, definitely. Another two questions refer to compensations regarding the warehouse fire in Romania. When do you expect 351 million PLN and business interruption compensation for now? What is the value of that? As for the property, so PLN 351 million, the advance would be 10%. It should be there at the end of October. We are passing documentation to the insurer to make it reliable in terms of our documentation. So it's like 10,000 of documents, invoicing documents. So I believe that this year it's going to be there. As for business interruption, we assess here. So I wouldn't like to give you an exact figure. Just business interruption includes additional logistics costs. So we assess that would be PLN 10 million monthly, the additional costs. As for the lost margin, this is the lost margin that was PLN 293 million. This is what you have in the slides as for the losses in current assets. We've been preparing a margin we would generate on these assets. We would probably negotiate with the insurer, but when we look at it in the second quarter, that was 54%, maybe from the discount, 45%. That would be the margin. So this is more or less the scale we are talking about. Another question regarding the opening of new stores. How many are you going to open till? 200-250 in the third quarter, 400-450 in the fourth quarter, Sinsay and 20 to 40 new stores of Reserved, Cropp, Mohito. Another question regarding Capex. What are the investment expenditures planned? For next year, well, our investment expenditure is somewhat boring. First, we'll go for the development of the store. So when December, we have the fixed guidance for this year. We'll also present the update for the years to come, then it will be easy to calculate it. So if, say, average Capex for Sinsay is EUR 450 per and for RCMH, it's 8. So everybody will be able to calculate on the basis of the number of stores what it will. This is a simple derivative of the number of openings. And the second biggest amount is logistics. And as I mentioned, this year, PLN 1 billion plus something. And next year, seeing what yield we have owing to the robotic solutions adopted, that can be a similar amount, closer to PLN 1 billion, maybe somewhat less, maybe PLN 1.0 billion, but we will see and a more accurate scale will be offered to you when we meet you next time. Two questions concerning a consumer. What is the condition of the consumer now to our mind? And secondly, how do we assess a customer in Central and Eastern Europe? Is the demand on the rise? How about price sensitivity compared to the previous quarters? Maybe starting from Poland, because again, we got retail consumption data, 3+% . The index we agree with when we look at our likes. I believe that after the weekend, we will also publish the materials that we collected during different conferences. We carried out an interesting analysis on the dynamics of retail consumption following our likes. So we are going to share that with you. And looking at this, access to statistical and macroeconomic data is what you have on a daily basis. What we can offer is the like dynamics. Then it is good to see what the correlation is, looking at the 3%-4% of our likes, even in those brands that we called premium price, so those top shelf in terms of prices. These increases are pretty good, and that shows that the collection was prepared in the right way. The power of the consumer is to be seen in these numbers. Yes, we agree with the trend that results from the macro data. As for the regions, Southern Europe and Eastern Europe, Kazakhstan perform really well, even above average. Central Europe, to our understanding, the Czech Republic, Slovakia, Hungary, maybe Hungary is somewhat better. Say owing to the fact that it belongs to the segment it does as well as possible in Sinsay. Operational costs first. Has G&A costs in the third quarter? Should they be similar to the costs from Q2? I believe that OPEX to sales, so this ratio of operational costs to sales, so we would expect a similar index here. We have these inefficiencies related to logistics. In Q2, that was just a single month, but in Q3, that will be August, September, and October, and during new season, we need to rent new warehousing stores, so those one-offs can be heavier, so to speak, but of course, this efficiency will be rolled further. We had an efficient basis last year, so we are pretty optimistic that in the ESR expenses to sales ratio, these costs should be comparable to what we had, and the second question is about operational costs. Now looking in 2026, and the question is, what can the level of operational costs be next year? I believe that what we will have reached this year, we will not want to, of course, talk about that before we are sure what the guidance is for this year, because that will set the tone for the coming years. But the guidance resulted from our cautious approach. We are in the first year of this fast acceleration, such dynamic and expansion. So we see that we are finding our ways through it pretty well. We had to introduce certain optimizations like the one in June, but we are not afraid to make such decisions because it is, after all, quality and profitability of the entire business that we care about. So by the end of the year, we will have time to go through different strategies, and then we will give you the proper update. Further questions concern the repayments of Russian receivables. That's a question. Can you see the lack of possibility, lack of willingness for these repayments to progress? Well, I hope it will come as a soothing piece of information. There is a lot of will. The data that we were given and on the basis of which we elaborated the new schedules are really accurate, and well, the company is our data, so it's only natural, but there is a lot of will on the side of the Russian party, and of course, we care to resolve an issue very much as well. This year we are in is the first year during which the company is working for its own purposes and account, and the model that we have in LPP is that the majority of major business fashion-related decisions are made in the center here, so of course, not having these competencies, the company in Russia had to build on its own, and they opened up a new chapter, a new business. They are learning how to make orders, how to file orders. We see that in their sales conditions in the part of LPP that they did get in the transitory period. Of course, they had more certainty in their operations. The working capital there well lost its dynamic somewhat, of course. Those who observe our results, well, you know that our payment period is 180 days plus for the goods. So the company in Russia was able to benefit from these periods. But now being a new business, well, in the majority of cases, the postponed payment periods were shortened by half. In some of the markets, they need to make that. But again, certainly there is a lot of will there, but also there are clear business-related reasons for what the situation is. Are there any other one-off events in your financial business activity apart from the ones concerning Russia? No, there are one-offs of those that we presented. But in our financial operations, there are two groups that pretty naturally grow. One is the interest from leasing, because this is the way they were modeled. So we rent all the new locations. So this IFRS part goes there. And it's natural that will grow with the volume of open stores. But the bigger group, the other bigger group that grew year on year in previous quarter, in the present one, and will keep on growing next one, financial costs. Our development, as you see, that situation is pretty comfortable, very comfortable. But this accelerated expansion, we had PLN 3.2 billion of resources gathered that we've now been consuming, and we use more of the loans that we had. And for the last two years, actually, there was no need for us to use that. And that means that the financial costs are higher. But predicting what the next question may be, we are in the process of complex refinancing, comprehensive refinancing. We will focus on the implementation of our strategy in the perspective of three to five years. At the end of October, beginning of November, we will close this process. In Q4, the situation is going to improve. Next question. It concerns like-for-likes in the third quarter still. It is about whether the like-for-likes grow mostly owing to the number of transactions or owing to the prices. I do not have this knowledge. Concerning Q3, Sinsay oriented. Of course, we also see that our loyalty program, Sinsay Club, has been performing really well. Owing to this, our clients collect different kinds of points that they can later exchange for discounts. Owing to that, they buy more. Our data show that the customer, the omnichannel customer, buys five times more than a single channel customer. Next question is about the warehouse in Romania. What is the plan as far as this warehouse goes? Are you going to rebuild that in the same location, or do you have a different plan? And when again would the operations be relaunched? This alternative is still being analyzed. We've been looking for a new location for our warehouse in Romania, whether it is going to be smaller or bigger. This is something that our logistics team has been working on, researching the market. But we were also originally planning to open another location in Romania, right next door, in relation to the location that, unfortunately, we lost in the fire. That will be around 66 square meters. And the full operation is planned for the beginning of November. That's going to be helpful, particularly in terms of e-commerce. As for the decision on whether we are rebuilding or renting a new location, well, the analyses are going on. We have around nine months, and we are trying to decide on the alternative in as short a time as possible. Another question about Romania, about insurance policy. In the business interruption insurance, is there a franchise so that the company covers the first few weeks or months, and it is only the consecutive period that is covered by the insurance? If so, how long is the franchise period? It was a very short one, days, not weeks or months, a matter of days, really. Another question refers to investments in logistics and e-commerce and AI-based solutions. Are you investing in AI? Yes, we are investing in new solutions on a regular basis, whether contact center. We talked about many times before. This was the most clear area for investment. And in back office and in preparing our collections. And in e-commerce, yes, in presenting our products in Sinsay brand, especially on our websites, we are developing, improving such solutions. We are checking various new solutions in logistics. We have a system how to optimize our operations in the warehouses, how to provide stock for the stores based on AI. We also have one program based on AI in Poland. And we also have a program for our leasing managers looking for locations. This is what we talked with Magda on many occasions. Our development model is based on local teams present in particular countries that are looking for non-obvious locations. Now they are supported with, well, big data or AI solution learning based on macro data and history, information about the traffic from mobile phones. The teams can check the locations. We are analyzing that, and we are rationally approaching that. I can recommend you the article, I believe, it was in The Times where AI is reiterated in many aspects, and we focus on solutions that are bringing us measurable results. I can also recommend Sinsay app. When you go through that, you can look through the products, and you can see that the products are presented against a certain background or with the help of models. This is what we apply AI solutions. We shorten the time and costs, of course, related to organizing a photoshoot outside. Another question refers to the competition. Do you see the increase in the scale of business when Shein is taxed, especially if we have smaller shipments? Well, that would be a certain balance of the rules of the game. In May, the United States did that. So they limited the de minimis parcels. That was $800, so EUR 150. So when we look at the prices from the Chinese platforms, this is above it. So this was a similar situation with Uber. So the taxi corporations were against it. So this is a similar situation. So we believe that all will compete on the same conditions. How many post-LPP stores are operating in Russia? Are these all? Do we have such knowledge about it? I think that most of these. I don't want to give you some false data. I don't have the exact numbers for you today. A question about inventories. How many are in terms of surplus per square meter? So when we look at 1800 and we recalculate it from our square meters, so this is more or less 7%-9%, I believe. Now a question about a mini format. We talk about the Sinsay brand. What is the current assessment of this format and whether the project was abandoned in terms of mini Sinsay? No. We are looking at this concept. This was a great number of stores out of our pipeline. So we want to diagnose that correctly, how to increase sales in these locations. So we need, I believe, perhaps 8% of the increase from square meters. And these locations will prove good results. From the practical point of view, we were looking at this from the new season. Still, we were analyzing in August, and we've been testing that in September. And we are increasing trend versus price. So this first offer is a bit limited towards the fashion-related products. So from the 1st October, the tests will be fully operational. With our next meeting, we will be able to share with you some results from that. Regarding Sinsay brand, as for categories, a woman, a child, or home is distinctive in terms of the popularity among the consumers or transactions, especially Back to School. In Sinsay Kids, we had significant increases. This year-over-year purchases related to going back to school was up. In total, I think business as usual, but the women, this is significant in terms of margin and number of products. Now home will be popular before Christmas because of the decorations. Another question about refinancing. What is the expectation about refinancing related to the lowered costs of financing our group? I can't talk about specific figures, but, giving you some context, we address all the needs. Supplier finance, so reverse factoring, current financing, and current expenditure. The process is comprehensive. This is done with a number of banks, very competitive. And at the end of the day, for us, stabilization is crucial. From this model, we had these bilateral models. We shift into more consortium-based structure, stable for many years ahead of us. So up to five years as for our strategic development. These financial aspects are going to be secured very well, which ultimately will help us refinancing our expenditure. We will improve our cash flow, and the payment of dividend will also be much smoother. That was the last question. Thank you for these questions. We would like to thank you also for your participation, and we will hear each other in December at the conference.

Speaker 2: Welcome, everybody. My name is Magdalena Kopaczewska, and I represent Investor Relations Unit in LPP. Marcin Bójko, CFO and Board Member of LPP, is here with me. Hi, and together we would like to invite you as the prospective. All in all, we are satisfied that this dynamics was positive, particularly in the Reserved brand. These were two-digit like-for-likes. In terms of e-com sales, we generated PLN 1.4 billion in the second quarter, 16% growth, and in currencies, constant currencies, of course, we were planning 22%. But in this channel, again, this difficult market showed its face with lower traffic. Welcome, everybody. welcome everybody My name is Magdalena Kopaczewska, and I represent Investor Relations Unit in LPP. my name is magdalena kopaczewska and i represent investor relations unit in lpp Marcin Bójko, CFO and Board Member of LPP, is here with me. marcin bójko cfo and board member of lpp is here with me Hi, and together we would like to invite you as the prospective. hi and together we would like to invite you as the prospective All in all, we are satisfied that this dynamics was positive, particularly in the Reserved brand. all in all we are satisfied that this dynamics was positive particularly in the reserved brand These were two-digit like-for-likes. these were two-digit like-for-likes In terms of e-com sales, we generated PLN 1.4 billion in the second quarter, 16% growth, and in currencies, constant currencies, of course, we were planning 22%. in terms of e-com sales we generated pln 1.4 billion in the second quarter 16% growth and in currencies constant currencies of course we were planning 22% But in this channel, again, this difficult market showed its face with lower traffic. but in this channel again this difficult market showed its face with lower traffic In the net, we decided to optimize the performance marketing costs, so the purchases of likes or clicks in the net. So maybe we did not. At 0.6 percentage point, that's the greatest share of the Sinsay brand in the entirety of our offer, and the remaining context is active managing of gross margin. What does that mean? Those of us who are with us regularly might remember that in June, a quarter ago, we announced that the plan for this year was 1,500 openings, but we bet on quality. We don't want to dilute profitability, and we parked the so-called mini concept for further analysis. That translates into the reduction of the number of openings. In the net, we decided to optimize the performance marketing costs, so the purchases of likes or clicks in the net. in the net we decided to optimize the performance marketing costs so the purchases of likes or clicks in the net So maybe we did not. so maybe we did not At 0.6 percentage point, that's the greatest share of the Sinsay brand in the entirety of our offer, and the remaining context is active managing of gross margin. at 0.6 percentage point that's the greatest share of the sinsay brand in the entirety of our offer and the remaining context is active managing of gross margin What does that mean? what does that mean Those of us who are with us regularly might remember that in June, a quarter ago, we announced that the plan for this year was 1,500 openings, but we bet on quality. those of us who are with us regularly might remember that in june a quarter ago we announced that the plan for this year was 1,500 openings but we bet on quality We don't want to dilute profitability, and we parked the so-called mini concept for further analysis. we don't want to dilute profitability and we parked the so-called mini concept for further analysis That translates into the reduction of the number of openings. that translates into the reduction of the number of openings But what it involves from the operational point of view is that in 2025, we entered with a greater stock for the new openings. Greater stock, so that means that we had greater volume of apparel to be sold. In order not to stay with this stock in the Sinsay brand, our sales team actively managed this balance between the volume sold and the percentage margin. We've been operating at a lower margin recently, but at the end of the day, 54% stable level, so much higher than still back in 2023. Somewhat lower than last year, but we are moving on to the second half of the year with more arguments that we are going to talk about as the presentation progresses. But what it involves from the operational point of view is that in 2025, we entered with a greater stock for the new openings. but what it involves from the operational point of view is that in 2025 we entered with a greater stock for the new openings Greater stock, so that means that we had greater volume of apparel to be sold. greater stock so that means that we had greater volume of apparel to be sold In order not to stay with this stock in the Sinsay brand, our sales team actively managed this balance between the volume sold and the percentage margin. in order not to stay with this stock in the sinsay brand our sales team actively managed this balance between the volume sold and the percentage margin We've been operating at a lower margin recently, but at the end of the day, 54% stable level, so much higher than still back in 2023. we've been operating at a lower margin recently but at the end of the day 54% stable level so much higher than still back in 2023 Somewhat lower than last year, but we are moving on to the second half of the year with more arguments that we are going to talk about as the presentation progresses. somewhat lower than last year but we are moving on to the second half of the year with more arguments that we are going to talk about as the presentation progresses Again, a good quarter, we did what was there to be done. Certainly, more arguments are appearing already right now. The third operational business leverage that we have an impact on are operational costs. We are particularly happy about this area because 2024 was the year of building up our capabilities towards accelerated growth. When we look at the bar chart, the cost per meter was around PLN 300- PLN 320 per square meter, but since the first quarter, these costs visibly decreased. This is the efficiency that we are aiming at rigorously approaching the control of costs. Where have we managed to reach the greatest potentials of cost efficiencies? Again, a good quarter, we did what was there to be done. again a good quarter we did what was there to be done Certainly, more arguments are appearing already right now. certainly more arguments are appearing already right now The third operational business leverage that we have an impact on are operational costs. the third operational business leverage that we have an impact on are operational costs We are particularly happy about this area because 2024 was the year of building up our capabilities towards accelerated growth. we are particularly happy about this area because 2024 was the year of building up our capabilities towards accelerated growth When we look at the bar chart, the cost per meter was around PLN 300- PLN 320 per square meter, but since the first quarter, these costs visibly decreased. when we look at the bar chart the cost per meter was around pln 300- pln 320 per square meter but since the first quarter these costs visibly decreased This is the efficiency that we are aiming at rigorously approaching the control of costs. this is the efficiency that we are aiming at rigorously approaching the control of costs Where have we managed to reach the greatest potentials of cost efficiencies? where have we managed to reach the greatest potentials of cost efficiencies Mostly what we built, the hinterland that we needed in order to deliver the pipeline openings, so we've got leasing, we've got investment teams, and the performance marketing we've mentioned. Last year, in the second quarter, we spent around 10% for advertisement in the internet related to the revenue generated in the internet, but then it dropped to just 8%, which is a visible saving. The situation of the consumer returned to the normal level in the second half of June, and in July, we defroze the spendings, but they remain at the more or less the same level now. And the third area that contributed to the decrease of cost is logistics. Mostly what we built, the hinterland that we needed in order to deliver the pipeline openings, so we've got leasing, we've got investment teams, and the performance marketing we've mentioned. mostly what we built the hinterland that we needed in order to deliver the pipeline openings so we've got leasing we've got investment teams and the performance marketing we've mentioned Last year, in the second quarter, we spent around 10% for advertisement in the internet related to the revenue generated in the internet, but then it dropped to just 8%, which is a visible saving. last year in the second quarter we spent around 10% for advertisement in the internet related to the revenue generated in the internet but then it dropped to just 8% which is a visible saving The situation of the consumer returned to the normal level in the second half of June, and in July, we defroze the spendings, but they remain at the more or less the same level now. the situation of the consumer returned to the normal level in the second half of june and in july we defroze the spendings but they remain at the more or less the same level now And the third area that contributed to the decrease of cost is logistics. and the third area that contributed to the decrease of cost is logistics Here, the greatest work was done. Last year, we launched a new warehouse in Romania, a new one in Bydgoszcz. We had many one-time costs. These processes had to standardize, normalize this curve of learning, acquired the proper shape, and now we can already enjoy these efficiencies. What we can see in CapEx, what we communicated within strategy this year and next year are the years of considerable investments in logistics. Logistics, not only in terms of expanding our warehouse capacity, but also robotic solutions that will translate into those great savings in OpEx. Here, the greatest work was done. here the greatest work was done Last year, we launched a new warehouse in Romania, a new one in Bydgoszcz. last year we launched a new warehouse in romania a new one in bydgoszcz We had many one-time costs. we had many one-time costs These processes had to standardize, normalize this curve of learning, acquired the proper shape, and now we can already enjoy these efficiencies. these processes had to standardize normalize this curve of learning acquired the proper shape and now we can already enjoy these efficiencies What we can see in CapEx, what we communicated within strategy this year and next year are the years of considerable investments in logistics. what we can see in capex what we communicated within strategy this year and next year are the years of considerable investments in logistics Logistics, not only in terms of expanding our warehouse capacity, but also robotic solutions that will translate into those great savings in OpEx. logistics not only in terms of expanding our warehouse capacity but also robotic solutions that will translate into those great savings in opex In the second quarter, in our results, we had two events, single-time, one-time events, and we will discuss them one by one. Looking at the left-hand side of the slide, warehouse fire in Romania, that was one location in our operational systems, in our operations. We divided it into two parts, DC and a smaller part, FC, so the one for handling internet orders. And the final amount that we lost in the remaining operational assets as losses is PLN 351 million, including PLN 293 million working assets. That's what we lost in terms of the actual apparel, but the rest is the warehouse with its equipment, with its fitting, including the robotic solutions, unfortunately. This is what we owned, and so that's all the value of the losses. In the second quarter, in our results, we had two events, single-time, one-time events, and we will discuss them one by one. in the second quarter in our results we had two events single-time one-time events and we will discuss them one by one Looking at the left-hand side of the slide, warehouse fire in Romania, that was one location in our operational systems, in our operations. looking at the left-hand side of the slide warehouse fire in romania that was one location in our operational systems in our operations We divided it into two parts, DC and a smaller part, FC, so the one for handling internet orders. we divided it into two parts dc and a smaller part fc so the one for handling internet orders And the final amount that we lost in the remaining operational assets as losses is PLN 351 million, including PLN 293 million working assets. and the final amount that we lost in the remaining operational assets as losses is pln 351 million including pln 293 million working assets That's what we lost in terms of the actual apparel, but the rest is the warehouse with its equipment, with its fitting, including the robotic solutions, unfortunately. that's what we lost in terms of the actual apparel but the rest is the warehouse with its equipment with its fitting including the robotic solutions unfortunately This is what we owned, and so that's all the value of the losses. this is what we owned and so that's all the value of the losses But recently, we got from the main co-insurer a decision about accepting responsibility for this event and positive recommendation of the advance payment payout. So on this basis, it was clear to us that in remaining operating revenue, we should budget a similar amount. So in PLN, the impact of this event is neutral. And this is something that closes this part concerning our assets, but to give you a broader comment, the other part of our insurance covered the so-called business interruption. And in this area, we are going to now assess the margin lost on the stock lost, and you can see the bullet above showing the value of it, plus additional costs. But recently, we got from the main co-insurer a decision about accepting responsibility for this event and positive recommendation of the advance payment payout. but recently we got from the main co-insurer a decision about accepting responsibility for this event and positive recommendation of the advance payment payout So on this basis, it was clear to us that in remaining operating revenue, we should budget a similar amount. so on this basis it was clear to us that in remaining operating revenue we should budget a similar amount So in PLN, the impact of this event is neutral. so in pln the impact of this event is neutral And this is something that closes this part concerning our assets, but to give you a broader comment, the other part of our insurance covered the so-called business interruption. and this is something that closes this part concerning our assets but to give you a broader comment the other part of our insurance covered the so-called business interruption And in this area, we are going to now assess the margin lost on the stock lost, and you can see the bullet above showing the value of it, plus additional costs. and in this area we are going to now assess the margin lost on the stock lost and you can see the bullet above showing the value of it plus additional costs Starting from the end of June, we work in a sub-optimal level. A lot of orders related with Romania, of course, transported from Poland, which increases the cost of distribution, all the cost of renting out additional floor area. This is also part of business interruption. We have nine months to sort it all out, so we monitor additional costs as we go, and we notify the insurer. Once this period is over, the time will come to sum it all up and also to settle the accounts within our insurance policy. So that's the first event, and in our results, we also have another one. And this is related with the update of the balance receivables after disposal of Russian business. Starting from the end of June, we work in a sub-optimal level. starting from the end of june we work in a sub-optimal level A lot of orders related with Romania, of course, transported from Poland, which increases the cost of distribution, all the cost of renting out additional floor area. a lot of orders related with romania of course transported from poland which increases the cost of distribution all the cost of renting out additional floor area This is also part of business interruption. this is also part of business interruption We have nine months to sort it all out, so we monitor additional costs as we go, and we notify the insurer. we have nine months to sort it all out so we monitor additional costs as we go and we notify the insurer Once this period is over, the time will come to sum it all up and also to settle the accounts within our insurance policy. once this period is over the time will come to sum it all up and also to settle the accounts within our insurance policy So that's the first event, and in our results, we also have another one. so that's the first event and in our results we also have another one And this is related with the update of the balance receivables after disposal of Russian business. and this is related with the update of the balance receivables after disposal of russian business And here, just to remind you, the context in May 2022, we divested the business in Russia, and the transition period was envisaged at four years. We shortened it to two years. So at the end of January, that period was closed, and the Russian investor took over what was there to be taken over. And our balance notes it nearly PLN 300 million for the sales of stores in Russia and nearly 600 was the receivables for the stock sold there within the transitory period as envisaged in the contract. So taking at it from the point of view of the first half of the year, in the first quarter, we didn't see any payments coming. So that was a delay versus the schedule. And here, just to remind you, the context in May 2022, we divested the business in Russia, and the transition period was envisaged at four years. and here just to remind you the context in may 2022 we divested the business in russia and the transition period was envisaged at four years We shortened it to two years. we shortened it to two years So at the end of January, that period was closed, and the Russian investor took over what was there to be taken over. so at the end of january that period was closed and the russian investor took over what was there to be taken over And our balance notes it nearly PLN 300 million for the sales of stores in Russia and nearly 600 was the receivables for the stock sold there within the transitory period as envisaged in the contract. and our balance notes it nearly pln 300 million for the sales of stores in russia and nearly 600 was the receivables for the stock sold there within the transitory period as envisaged in the contract So taking at it from the point of view of the first half of the year, in the first quarter, we didn't see any payments coming. so taking at it from the point of view of the first half of the year in the first quarter we didn't see any payments coming So that was a delay versus the schedule. so that was a delay versus the schedule But starting from July, we can see weekly payments coming in a fixed amount every week. By today, we've been receiving them regularly, but that's slower than forecasted at the end of the previous year. So on analyzing it all with a Russian company, because this company is in debt, so when we made a realistic approach to the possibility of them paying back, the schedule that was supposed to close in mid-2026 was prolonged until mid-2029. Now, the 30 million that we can see in the first bullet on the right-hand side, this is the result of it and calculating the value of money in time. So that's what was written off. But starting from July, we can see weekly payments coming in a fixed amount every week. but starting from july we can see weekly payments coming in a fixed amount every week By today, we've been receiving them regularly, but that's slower than forecasted at the end of the previous year. by today we've been receiving them regularly but that's slower than forecasted at the end of the previous year So on analyzing it all with a Russian company, because this company is in debt, so when we made a realistic approach to the possibility of them paying back, the schedule that was supposed to close in mid-2026 was prolonged until mid-2029. so on analyzing it all with a russian company because this company is in debt so when we made a realistic approach to the possibility of them paying back the schedule that was supposed to close in mid-2026 was prolonged until mid-2029 Now, the 30 million that we can see in the first bullet on the right-hand side, this is the result of it and calculating the value of money in time. now the 30 million that we can see in the first bullet on the right-hand side this is the result of it and calculating the value of money in time So that's what was written off. so that's what was written off So this amount in the balance sheet will be lower, but this is something that, of course, burdens our result in the second quarter. And now extrapolating these flows a bit, again, we took a cautious approach to the other stream of payments, namely those for the shares in the company or for the stores sold. And again, here, just to remind you, in December 2023, we got the first installment. So this amount in the balance sheet will be lower, but this is something that, of course, burdens our result in the second quarter. so this amount in the balance sheet will be lower but this is something that of course burdens our result in the second quarter And now extrapolating these flows a bit, again, we took a cautious approach to the other stream of payments, namely those for the shares in the company or for the stores sold. and now extrapolating these flows a bit again we took a cautious approach to the other stream of payments namely those for the shares in the company or for the stores sold And again, here, just to remind you, in December 2023, we got the first installment. and again here just to remind you in december 2023 we got the first installment In December 2024, we got the second one. Now, in December this year and the following year, we were supposed to get the third and the fourth one, the last one, $47.5 million each, but seeing what delays we have in this particular stream of payment for what was sold, again, we decided to be cautious about that and again prolong the repayment schedule concerning this part, and again, the same discount approach means that we see -$35 million burdening us this year. We don't know whether this will materialize. In December 2024, we got the second one. in december 2024 we got the second one Now, in December this year and the following year, we were supposed to get the third and the fourth one, the last one, $47.5 million each, but seeing what delays we have in this particular stream of payment for what was sold, again, we decided to be cautious about that and again prolong the repayment schedule concerning this part, and again, the same discount approach means that we see -$35 million burdening us this year. now in december this year and the following year we were supposed to get the third and the fourth one the last one $47.5 million each but seeing what delays we have in this particular stream of payment for what was sold again we decided to be cautious about that and again prolong the repayment schedule concerning this part and again the same discount approach means that we see -$35 million burdening us this year We don't know whether this will materialize. we don't know whether this will materialize As I said, by the end of December, there is the deadline for this payment to come in, but we want our report to be conservative and reflect as transparently as possible what happens in the business. Summing up all the components of this basic business that we have impact on, so income, margin, and OPEX, again, the results of the second quarter look positive. EBIT nearly, you can see it on the left-hand side, and EBIT was around PLN 700 million net, nearly PLN 500 million. The profit grew year on year in those categories. As I said, by the end of December, there is the deadline for this payment to come in, but we want our report to be conservative and reflect as transparently as possible what happens in the business. as i said by the end of december there is the deadline for this payment to come in but we want our report to be conservative and reflect as transparently as possible what happens in the business Summing up all the components of this basic business that we have impact on, so income, margin, and OPEX, again, the results of the second quarter look positive. summing up all the components of this basic business that we have impact on so income margin and opex again the results of the second quarter look positive EBIT nearly, you can see it on the left-hand side, and EBIT was around PLN 700 million net, nearly PLN 500 million. ebit nearly you can see it on the left-hand side and ebit was around pln 700 million net nearly pln 500 million The profit grew year on year in those categories. the profit grew year on year in those categories Now, when you look at the margins, so the clouds below the bars, you can see that despite those one-off events, the margins, practically speaking, are only slightly lower than last year. In the scale of the entire half the year, the season spring-summer, we closed with even better dynamics. EBITDA, EBIT, and net profit grew by double digits and over PLN 1.2 billion EBITDA for the first half is a very nice result, comparable profitability levels. Now, we are entering the second half of the year with greater optimism, believing that things will only look up. Now, when you look at the margins, so the clouds below the bars, you can see that despite those one-off events, the margins, practically speaking, are only slightly lower than last year. now when you look at the margins so the clouds below the bars you can see that despite those one-off events the margins practically speaking are only slightly lower than last year In the scale of the entire half the year, the season spring-summer, we closed with even better dynamics. in the scale of the entire half the year the season spring-summer we closed with even better dynamics EBITDA, EBIT, and net profit grew by double digits and over PLN 1.2 billion EBITDA for the first half is a very nice result, comparable profitability levels. ebitda ebit and net profit grew by double digits and over pln 1.2 billion ebitda for the first half is a very nice result comparable profitability levels Now, we are entering the second half of the year with greater optimism, believing that things will only look up. now we are entering the second half of the year with greater optimism believing that things will only look up

Speaker 1: This is all from us for the financial results. Let's look at the secured inventory. As I mentioned, with the margin, our inventory is going to grow with the development of the network. These values at the end of the second quarter, we can see PLN 5.2 billion. It is going to grow, but we, as the management of the company, we want these values regarding the inventories not to grow that much, and here, in this short-term period, 1,819, 1,800, 1,800, this is the goal. I believe that we need two or three quarters. So in 2026, we should be able to control the inventory. The structure here is high quality. It is dedicated for the new stores being open. This is all from us for the financial results. this is all from us for the financial results Let's look at the secured inventory. let's look at the secured inventory As I mentioned, with the margin, our inventory is going to grow with the development of the network. as i mentioned with the margin our inventory is going to grow with the development of the network These values at the end of the second quarter, we can see PLN 5.2 billion. these values at the end of the second quarter we can see pln 5.2 billion It is going to grow, but we, as the management of the company, we want these values regarding the inventories not to grow that much, and here, in this short-term period, 1,819, 1,800, 1,800, this is the goal. it is going to grow but we as the management of the company we want these values regarding the inventories not to grow that much and here in this short-term period 1,819 1,800 1,800 this is the goal I believe that we need two or three quarters. i believe that we need two or three quarters So in 2026, we should be able to control the inventory. so in 2026 we should be able to control the inventory The structure here is high quality. the structure here is high quality It is dedicated for the new stores being open. it is dedicated for the new stores being open So we are going to manage the inventory so that in the short perspective, we can go back to our short-term optimal solutions. Investment expenditure over PLN 1.2 billion. So these are simple figures we've been showing you already together with our development based on new stores of Sinsay. The expenditure is the highest, almost PLN 380 million in the second quarter. As I mentioned, this year and the next year involves investments in logistics, PLN 0.5 billion. That was the first year in terms of investments. And the new warehouse capacity, 20%. So over one-fifth, these are new solutions regarding robotics, providing us the optimization of OPEX. So we are going to manage the inventory so that in the short perspective, we can go back to our short-term optimal solutions. so we are going to manage the inventory so that in the short perspective we can go back to our short-term optimal solutions Investment expenditure over PLN 1.2 billion. investment expenditure over pln 1.2 billion So these are simple figures we've been showing you already together with our development based on new stores of Sinsay. so these are simple figures we've been showing you already together with our development based on new stores of sinsay The expenditure is the highest, almost PLN 380 million in the second quarter. the expenditure is the highest almost pln 380 million in the second quarter As I mentioned, this year and the next year involves investments in logistics, PLN 0.5 billion. as i mentioned this year and the next year involves investments in logistics, pln 0.5 billion That was the first year in terms of investments. that was the first year in terms of investments And the new warehouse capacity, 20%. and the new warehouse capacity 20% So over one-fifth, these are new solutions regarding robotics, providing us the optimization of OPEX. so over one-fifth these are new solutions regarding robotics providing us the optimization of opex The cost of one piece in the warehouse in Bydgoszcz dropped 2.5x. This solution in the second quarter was not fully operational. From September, we have full capacities over there. So we believe that the yield is going to be much, much better. Our investment is also perceived with safe debt level. So the leverage here, 1.3. This is a very good result. This is all about the financial aspects. This is the end of September, so we should look at what is happening in this season. The beginning of the third quarter, this is Back to School period. The cost of one piece in the warehouse in Bydgoszcz dropped 2.5x . the cost of one piece in the warehouse in bydgoszcz dropped 2.5x This solution in the second quarter was not fully operational. this solution in the second quarter was not fully operational From September, we have full capacities over there. from september we have full capacities over there So we believe that the yield is going to be much, much better. so we believe that the yield is going to be much much better Our investment is also perceived with safe debt level. our investment is also perceived with safe debt level So the leverage here, 1.3. so the leverage here 1.3 This is a very good result. this is a very good result This is all about the financial aspects. this is all about the financial aspects This is the end of September, so we should look at what is happening in this season. this is the end of september so we should look at what is happening in this season The beginning of the third quarter, this is Back to School period. the beginning of the third quarter this is back to school period So you can see here, so that was a strong Back to School period. When we look at these blue boxes, the increase in omnichannel, so in stationary shops, this is 35% from mid-August till the first week of September, in online 40%, offline 33%. So this was the period of lower sales, so our dynamics was twice as good. So we are going back to good results. The weather in recent years was different. This year, however, it was a totally different season. So you can see here, so that was a strong Back to School period. so you can see here so that was a strong back to school period When we look at these blue boxes, the increase in omnichannel, so in stationary shops, this is 35% from mid-August till the first week of September, in online 40%, offline 33%. when we look at these blue boxes the increase in omnichannel so in stationary shops this is 35% from mid-august till the first week of september in online 40% offline 33% So this was the period of lower sales, so our dynamics was twice as good. so this was the period of lower sales so our dynamics was twice as good So we are going back to good results. so we are going back to good results The weather in recent years was different. the weather in recent years was different This year, however, it was a totally different season. this year however it was a totally different season So this Back to School period was clearly visible in our results. When we look at the outlook for the third quarter, from the first August till the end of September, we can see 22% year-on-year increase in sales. Positive response as for the autumn-winter collection in all the brands, Reserved, Cropp, House, Mohito. As for the development, from 200 to 200 new stores, this is what we plan for the third quarter, 25. And good information, at the end of October, dividend payment at the end of April. That was the first part, over 600 million PLN. And the second part is going to be paid out at the end of the third quarter. So this Back to School period was clearly visible in our results. so this back to school period was clearly visible in our results When we look at the outlook for the third quarter, from the first August till the end of September, we can see 22% year-on-year increase in sales. when we look at the outlook for the third quarter from the first august till the end of september we can see 22% year-on-year increase in sales Positive response as for the autumn-winter collection in all the brands, Reserved, Cropp, House, Mohito. positive response as for the autumn-winter collection in all the brands, reserved cropp house mohito As for the development, from 200 to 200 new stores, this is what we plan for the third quarter, 25. as for the development from 200 to 200 new stores this is what we plan for the third quarter 25 And good information, at the end of October, dividend payment at the end of April. and good information at the end of october dividend payment at the end of april That was the first part, over 600 million PLN. that was the first part over 600 million pln And the second part is going to be paid out at the end of the third quarter. and the second part is going to be paid out at the end of the third quarter Now, the targets for 2025, summing up the quarters, we can see in the middle column, the first half of the year actuals. Looking at the top PLN 10.5 billion, these are sales from core business, an increase in offline plus 90% and online 20%. So these are our goals, and these are the results. As for the sales, we are in the lower range of our dynamics. Looking from the perspective of the second quarter, we are happy at the end of the day. When we look at the seasons and the second season is much stronger. We have 50% of sales generated in the second season, so we are happy about our goal. Now, the targets for 2025, summing up the quarters, we can see in the middle column, the first half of the year actuals. now the targets for 2025 summing up the quarters we can see in the middle column the first half of the year actuals Looking at the top PLN 10.5 billion, these are sales from core business, an increase in offline plus 90% and online 20%. looking at the top pln 10.5 billion these are sales from core business an increase in offline plus 90% and online 20% So these are our goals, and these are the results. so these are our goals and these are the results As for the sales, we are in the lower range of our dynamics. as for the sales we are in the lower range of our dynamics Looking from the perspective of the second quarter, we are happy at the end of the day. looking from the perspective of the second quarter we are happy at the end of the day When we look at the seasons and the second season is much stronger. when we look at the seasons and the second season is much stronger We have 50% of sales generated in the second season, so we are happy about our goal. we have 50% of sales generated in the second season so we are happy about our goal After the first half of the year, when we had some challenges ahead of us, the margin, EBITDA, and net margin are at the top levels according to our guidance. So we enter the second half of the year. We had Back to School period. Now, Black Week. This is a strong retail sales and Christmas. After the first half of the year, when we had some challenges ahead of us, the margin, EBITDA, and net margin are at the top levels according to our guidance. after the first half of the year when we had some challenges ahead of us the margin ebitda and net margin are at the top levels according to our guidance So we enter the second half of the year. so we enter the second half of the year We had Back to School period. we had back to school period Now, Black Week. now black week This is a strong retail sales and Christmas. this is a strong retail sales and christmas So the periods for generating good margin is ahead of us, so we will have a few. But we are happy about the goals that we want to achieve. So when we meet one more time with you at the end of the year around December, so I believe before Christmas, we will be able to sum up the results from the third quarter, and we will be able to give you the results and increase the guidance. This is all from us for the financial results, so we can move on quickly to Q&A. So the periods for generating good margin is ahead of us, so we will have a few. so the periods for generating good margin is ahead of us so we will have a few But we are happy about the goals that we want to achieve. but we are happy about the goals that we want to achieve So when we meet one more time with you at the end of the year around December, so I believe before Christmas, we will be able to sum up the results from the third quarter, and we will be able to give you the results and increase the guidance. so when we meet one more time with you at the end of the year around december so i believe before christmas we will be able to sum up the results from the third quarter and we will be able to give you the results and increase the guidance This is all from us for the financial results, so we can move on quickly to Q&A. this is all from us for the financial results so we can move on quickly to q&a First question refers to a margin and what is the margin that the company expects in the third quarter. What are the current margins that we are selling products right now? And how about the low rate of exchange dollar to zloty and how this is going to affect the third quarter? Thank you for the question. First question refers to a margin and what is the margin that the company expects in the third quarter. first question refers to a margin and what is the margin that the company expects in the third quarter What are the current margins that we are selling products right now? what are the current margins that we are selling products right now And how about the low rate of exchange dollar to zloty and how this is going to affect the third quarter? and how about the low rate of exchange dollar to zloty and how this is going to affect the third quarter Thank you for the question. thank you for the question It's a very good one. Yes. Macro is helping us. The collections in the first quarter, that was four zloty in terms of rates of exchange, then we will have 3.7. So it's still some potential ahead of us. We will see what this is going to be. We haven't updated our guidance. We need to observe the situation with gross margin or with inventories. We need to actively manage our margin in Sinsay brand to manage the inventories. We cannot just stay and leave that for the next quarters. So we still have time to manage the stock. And I believe that after the third quarter, we will have more information in Sinsay brand, so the majority of our business. It's a very good one. it's a very good one Yes. yes Macro is helping us. macro is helping us The collections in the first quarter, that was four zloty in terms of rates of exchange, then we will have 3.7. the collections in the first quarter that was four zloty in terms of rates of exchange then we will have 3.7 So it's still some potential ahead of us. so it's still some potential ahead of us We will see what this is going to be. we will see what this is going to be We haven't updated our guidance. we haven't updated our guidance We need to observe the situation with gross margin or with inventories. we need to observe the situation with gross margin or with inventories We need to actively manage our margin in Sinsay brand to manage the inventories. we need to actively manage our margin in sinsay brand to manage the inventories We cannot just stay and leave that for the next quarters. we cannot just stay and leave that for the next quarters So we still have time to manage the stock. so we still have time to manage the stock And I believe that after the third quarter, we will have more information in Sinsay brand, so the majority of our business. and i believe that after the third quarter we will have more information in sinsay brand so the majority of our business We will not comment, so probably we will just need to touch upon this exchange rate. The level 54, 53, 54 in gross margin. So what are the grounds for it? Yes, we agree that there is some upside here, but with macro that is favorable for us, we want to see how this is going to work with the discounts with such significant inventories that we have. Yes, I agree when you look at it from the summary point of view, there is more optimism in there, but let's wait and we will see that. In the meantime, we will have a lot of meetings. We communicate with the market. So if we can see the results and the situation going as per our forecast, then it is going to be good. We will not comment, so probably we will just need to touch upon this exchange rate. we will not comment so probably we will just need to touch upon this exchange rate The level 54, 53, 54 in gross margin. the level 54 53 54 in gross margin So what are the grounds for it? so what are the grounds for it Yes, we agree that there is some upside here, but with macro that is favorable for us, we want to see how this is going to work with the discounts with such significant inventories that we have. yes we agree that there is some upside here but with macro that is favorable for us we want to see how this is going to work with the discounts with such significant inventories that we have Yes, I agree when you look at it from the summary point of view, there is more optimism in there, but let's wait and we will see that. yes i agree when you look at it from the summary point of view there is more optimism in there but let's wait and we will see that In the meantime, we will have a lot of meetings. in the meantime we will have a lot of meetings We communicate with the market. we communicate with the market So if we can see the results and the situation going as per our forecast, then it is going to be good. so if we can see the results and the situation going as per our forecast then it is going to be good In August, we also higher margin in August. In September, it continues. It's a bit higher even in September, but let's wait. So please be patient until the end of December. Then third quarter, like-for-likes. What were the like-for-likes at the beginning of the third quarter? It was closer to 10% or 3%-4%. I think the highest it was House and Reserved, very high, around 20%. But here, I would also give you a broader context for that as for like-for-likes. 3%-4%, it is not really impressive. We want 5% or 7%, but when you look at two-year like-for-likes, then we can see this is really 11%. Sinsay brand last year generated really high like-for-like sales. In August, we also higher margin in August. in august we also higher margin in august In September, it continues. in september it continues It's a bit higher even in September, but let's wait. it's a bit higher even in september but let's wait So please be patient until the end of December. so please be patient until the end of december Then third quarter, like-for-likes. then third quarter like-for-likes What were the like-for-likes at the beginning of the third quarter? what were the like-for-likes at the beginning of the third quarter It was closer to 10% or 3%-4%. it was closer to 10% or 3%-4% I think the highest it was House and Reserved, very high, around 20%. i think the highest it was house and reserved very high around 20% But here, I would also give you a broader context for that as for like-for-likes. 3%-4%, it is not really impressive. but here i would also give you a broader context for that as for like-for-likes 3%-4% it is not really impressive We want 5% or 7%, but when you look at two-year like-for-likes, then we can see this is really 11%. we want 5% or 7% but when you look at two-year like-for-likes then we can see this is really 11% Sinsay brand last year generated really high like-for-like sales. sinsay brand last year generated really high like-for-like sales Now it is stabilizing. I know that with every conference, I keep repeating that, but this is a very good context not to look at it from the perspective of only short-term period, but a longer perspective. Another question refers to a comment regarding the write-offs and receivables from the agents. What is the best case scenario here? The worst case scenario, sorry. Now it is stabilizing. now it is stabilizing I know that with every conference, I keep repeating that, but this is a very good context not to look at it from the perspective of only short-term period, but a longer perspective. i know that with every conference i keep repeating that but this is a very good context not to look at it from the perspective of only short-term period but a longer perspective Another question refers to a comment regarding the write-offs and receivables from the agents. another question refers to a comment regarding the write-offs and receivables from the agents What is the best case scenario here? what is the best case scenario here The worst case scenario, sorry. the worst case scenario sorry

Speaker 2: So maximum write-off would be worst, but we haven't seen any indications definitely that the repayments are slower. But please believe me that as the management of the company and as the company, we take care about the interest of our stakeholders. So we analyze the situation and we exchange data with the Russian company. So maximum write-off would be worst, but we haven't seen any indications definitely that the repayments are slower. so maximum write-off would be worst but we haven't seen any indications definitely that the repayments are slower But please believe me that as the management of the company and as the company, we take care about the interest of our stakeholders. but please believe me that as the management of the company and as the company we take care about the interest of our stakeholders So we analyze the situation and we exchange data with the Russian company. so we analyze the situation and we exchange data with the russian company So we've been waiting till the last day as for the impact and figures. Writing off almost PLN 1.9 billion from the balance sheet seems easy, but we try to look at it from a broader context, how this can affect a motivation in recovering these resources. So in the interest of our shareholders, it would be best to do it this way as I presented. It seems that this repayment for the goods is very conservative, and I wouldn't expect in the nearest future any additional changes. So we've been waiting till the last day as for the impact and figures. so we've been waiting till the last day as for the impact and figures Writing off almost PLN 1.9 billion from the balance sheet seems easy, but we try to look at it from a broader context, how this can affect a motivation in recovering these resources. writing off almost pln 1.9 billion from the balance sheet seems easy but we try to look at it from a broader context how this can affect a motivation in recovering these resources So in the interest of our shareholders, it would be best to do it this way as I presented. so in the interest of our shareholders it would be best to do it this way as i presented It seems that this repayment for the goods is very conservative, and I wouldn't expect in the nearest future any additional changes. it seems that this repayment for the goods is very conservative and i wouldn't expect in the nearest future any additional changes But as I mentioned, as for the repayments for the shares, we look at it and we decided for the cautious approach. We will see what the situation is going to look like in December, and this is the best information that we can provide today. And also Russian receivables, another question, what was the expected as for the third repayment in December? $47.5 million. $5 million. But as I mentioned, as for the repayments for the shares, we look at it and we decided for the cautious approach. but as i mentioned as for the repayments for the shares we look at it and we decided for the cautious approach We will see what the situation is going to look like in December, and this is the best information that we can provide today. we will see what the situation is going to look like in december and this is the best information that we can provide today And also Russian receivables, another question, what was the expected as for the third repayment in December? $47.5 million. $5 million. and also russian receivables another question what was the expected as for the third repayment in december $47.5 million $5 million

Speaker 1: Now we move on to the question about e-commerce platform. Are you working on the new e-commerce platform? If yes, when do you plan to launch it? Yes, there was a lot of press information and we had a lot of questions regarding this topic. Now we move on to the question about e-commerce platform. now we move on to the question about e-commerce platform Are you working on the new e-commerce platform? are you working on the new e-commerce platform If yes, when do you plan to launch it? if yes when do you plan to launch it Yes, there was a lot of press information and we had a lot of questions regarding this topic. yes there was a lot of press information and we had a lot of questions regarding this topic Yes, looking at the strength of e-commerce, 14.5% as for the dynamic growth, this number is lower than what we expected. When we look at online players and broader market and the competition, 14% plus 5%, that was twice quicker development as others, and we did much better, and LPP and e-commerce is strong as for Sinsay brand, our driving force. The apps are the most frequently downloaded app. We can see that this platform you are asking about is a natural following step. We analyze everything, but for now, this is too early. When we have more information, we will go back to this topic, definitely. Yes, looking at the strength of e-commerce, 14.5% as for the dynamic growth, this number is lower than what we expected. yes looking at the strength of e-commerce 14.5% as for the dynamic growth this number is lower than what we expected When we look at online players and broader market and the competition, 14% plus 5%, that was twice quicker development as others, and we did much better, and LPP and e-commerce is strong as for Sinsay brand, our driving force. when we look at online players and broader market and the competition 14% plus 5% that was twice quicker development as others and we did much better and lpp and e-commerce is strong as for sinsay brand our driving force The apps are the most frequently downloaded app. the apps are the most frequently downloaded app We can see that this platform you are asking about is a natural following step. we can see that this platform you are asking about is a natural following step We analyze everything, but for now, this is too early. we analyze everything but for now this is too early When we have more information, we will go back to this topic, definitely. when we have more information we will go back to this topic definitely Another two questions refer to compensations regarding the warehouse fire in Romania. When do you expect 351 million PLN and business interruption compensation for now? What is the value of that? Another two questions refer to compensations regarding the warehouse fire in Romania. another two questions refer to compensations regarding the warehouse fire in romania When do you expect 351 million PLN and business interruption compensation for now? when do you expect 351 million pln and business interruption compensation for now What is the value of that? what is the value of that As for the property, so PLN 351 million, the advance would be 10%. It should be there at the end of October. We are passing documentation to the insurer to make it reliable in terms of our documentation. So it's like 10,000 of documents, invoicing documents. So I believe that this year it's going to be there. As for business interruption, we assess here. So I wouldn't like to give you an exact figure. Just business interruption includes additional logistics costs. So we assess that would be PLN 10 million monthly, the additional costs. As for the property, so PLN 351 million, the advance would be 10%. as for the property so pln 351 million the advance would be 10% It should be there at the end of October. it should be there at the end of october We are passing documentation to the insurer to make it reliable in terms of our documentation. we are passing documentation to the insurer to make it reliable in terms of our documentation So it's like 10,000 of documents, invoicing documents. so it's like 10,000 of documents invoicing documents So I believe that this year it's going to be there. so i believe that this year it's going to be there As for business interruption, we assess here. as for business interruption we assess here So I wouldn't like to give you an exact figure. so i wouldn't like to give you an exact figure Just business interruption includes additional logistics costs. just business interruption includes additional logistics costs So we assess that would be PLN 10 million monthly, the additional costs. so we assess that would be pln 10 million monthly the additional costs As for the lost margin, this is the lost margin that was PLN 293 million. This is what you have in the slides as for the losses in current assets. We've been preparing a margin we would generate on these assets. We would probably negotiate with the insurer, but when we look at it in the second quarter, that was 54%, maybe from the discount, 45%. That would be the margin. So this is more or less the scale we are talking about. Another question regarding the opening of new stores. How many are you going to open till? 200-250 in the third quarter, 400-450 in the fourth quarter, Sinsay and 20 to 40 new stores of Reserved, Cropp, Mohito. As for the lost margin, this is the lost margin that was PLN 293 million. as for the lost margin this is the lost margin that was pln 293 million This is what you have in the slides as for the losses in current assets. this is what you have in the slides as for the losses in current assets We've been preparing a margin we would generate on these assets. we've been preparing a margin we would generate on these assets We would probably negotiate with the insurer, but when we look at it in the second quarter, that was 54%, maybe from the discount, 45%. we would probably negotiate with the insurer but when we look at it in the second quarter that was 54% maybe from the discount 45% That would be the margin. that would be the margin So this is more or less the scale we are talking about. so this is more or less the scale we are talking about Another question regarding the opening of new stores. another question regarding the opening of new stores How many are you going to open till? 200-250 in the third quarter, 400-450 in the fourth quarter, Sinsay and 20 to 40 new stores of Reserved, Cropp, Mohito. how many are you going to open till 200-250 in the third quarter 400-450 in the fourth quarter sinsay and 20 to 40 new stores of reserved cropp mohito Another question regarding Capex. What are the investment expenditures planned? Another question regarding Capex. another question regarding capex What are the investment expenditures planned? what are the investment expenditures planned

Speaker 2: For next year, well, our investment expenditure is somewhat boring. First, we'll go for the development of the store. So when December, we have the fixed guidance for this year. We'll also present the update for the years to come, then it will be easy to calculate it. For next year, well, our investment expenditure is somewhat boring. for next year well our investment expenditure is somewhat boring First, we'll go for the development of the store. first we'll go for the development of the store So when December, we have the fixed guidance for this year. so when december we have the fixed guidance for this year We'll also present the update for the years to come, then it will be easy to calculate it. we'll also present the update for the years to come then it will be easy to calculate it So if, say, average Capex for Sinsay is EUR 450 per and for RCMH, it's 8. So everybody will be able to calculate on the basis of the number of stores what it will. This is a simple derivative of the number of openings. And the second biggest amount is logistics. And as I mentioned, this year, PLN 1 billion plus something. And next year, seeing what yield we have owing to the robotic solutions adopted, that can be a similar amount, closer to PLN 1 billion, maybe somewhat less, maybe PLN 1.0 billion, but we will see and a more accurate scale will be offered to you when we meet you next time. So if, say, average Capex for Sinsay is EUR 450 per and for RCMH, it's 8. so if say average capex for sinsay is eur 450 per and for rcmh it's 8 So everybody will be able to calculate on the basis of the number of stores what it will. so everybody will be able to calculate on the basis of the number of stores what it will This is a simple derivative of the number of openings. this is a simple derivative of the number of openings And the second biggest amount is logistics. and the second biggest amount is logistics And as I mentioned, this year, PLN 1 billion plus something. and as i mentioned this year, pln 1 billion plus something And next year, seeing what yield we have owing to the robotic solutions adopted, that can be a similar amount, closer to PLN 1 billion, maybe somewhat less, maybe PLN 1.0 billion, but we will see and a more accurate scale will be offered to you when we meet you next time. and next year seeing what yield we have owing to the robotic solutions adopted that can be a similar amount closer to pln 1 billion maybe somewhat less, maybe pln 1.0 billion but we will see and a more accurate scale will be offered to you when we meet you next time Two questions concerning a consumer. What is the condition of the consumer now to our mind? And secondly, how do we assess a customer in Central and Eastern Europe? Is the demand on the rise? How about price sensitivity compared to the previous quarters? Maybe starting from Poland, because again, we got retail consumption data, 3+% . The index we agree with when we look at our likes. I believe that after the weekend, we will also publish the materials that we collected during different conferences. We carried out an interesting analysis on the dynamics of retail consumption following our likes. Two questions concerning a consumer. two questions concerning a consumer What is the condition of the consumer now to our mind? what is the condition of the consumer now to our mind And secondly, how do we assess a customer in Central and Eastern Europe? and secondly how do we assess a customer in central and eastern europe Is the demand on the rise? is the demand on the rise How about price sensitivity compared to the previous quarters? how about price sensitivity compared to the previous quarters Maybe starting from Poland, because again, we got retail consumption data, 3+% . maybe starting from poland because again we got retail consumption data 3+% The index we agree with when we look at our likes. the index we agree with when we look at our likes I believe that after the weekend, we will also publish the materials that we collected during different conferences. i believe that after the weekend we will also publish the materials that we collected during different conferences We carried out an interesting analysis on the dynamics of retail consumption following our likes. we carried out an interesting analysis on the dynamics of retail consumption following our likes So we are going to share that with you. And looking at this, access to statistical and macroeconomic data is what you have on a daily basis. What we can offer is the like dynamics. Then it is good to see what the correlation is, looking at the 3%-4% of our likes, even in those brands that we called premium price, so those top shelf in terms of prices. So we are going to share that with you. so we are going to share that with you And looking at this, access to statistical and macroeconomic data is what you have on a daily basis. and looking at this access to statistical and macroeconomic data is what you have on a daily basis What we can offer is the like dynamics. what we can offer is the like dynamics Then it is good to see what the correlation is, looking at the 3%-4% of our likes, even in those brands that we called premium price, so those top shelf in terms of prices. then it is good to see what the correlation is looking at the 3%-4% of our likes even in those brands that we called premium price so those top shelf in terms of prices These increases are pretty good, and that shows that the collection was prepared in the right way. The power of the consumer is to be seen in these numbers. Yes, we agree with the trend that results from the macro data. As for the regions, Southern Europe and Eastern Europe, Kazakhstan perform really well, even above average. Central Europe, to our understanding, the Czech Republic, Slovakia, Hungary, maybe Hungary is somewhat better. Say owing to the fact that it belongs to the segment it does as well as possible in Sinsay. Operational costs first. Has G&A costs in the third quarter? These increases are pretty good, and that shows that the collection was prepared in the right way. these increases are pretty good and that shows that the collection was prepared in the right way The power of the consumer is to be seen in these numbers. the power of the consumer is to be seen in these numbers Yes, we agree with the trend that results from the macro data. yes we agree with the trend that results from the macro data As for the regions, Southern Europe and Eastern Europe, Kazakhstan perform really well, even above average. as for the regions southern europe and eastern europe kazakhstan perform really well even above average Central Europe, to our understanding, the Czech Republic, Slovakia, Hungary, maybe Hungary is somewhat better. central europe to our understanding the czech republic slovakia hungary maybe hungary is somewhat better Say owing to the fact that it belongs to the segment it does as well as possible in Sinsay. say owing to the fact that it belongs to the segment it does as well as possible in sinsay Operational costs first. operational costs first Has G&A costs in the third quarter? has g&a costs in the third quarter Should they be similar to the costs from Q2? I believe that OPEX to sales, so this ratio of operational costs to sales, so we would expect a similar index here. We have these inefficiencies related to logistics. Should they be similar to the costs from Q2? should they be similar to the costs from q2 I believe that OPEX to sales, so this ratio of operational costs to sales, so we would expect a similar index here. i believe that opex to sales so this ratio of operational costs to sales so we would expect a similar index here We have these inefficiencies related to logistics. we have these inefficiencies related to logistics In Q2, that was just a single month, but in Q3, that will be August, September, and October, and during new season, we need to rent new warehousing stores, so those one-offs can be heavier, so to speak, but of course, this efficiency will be rolled further. We had an efficient basis last year, so we are pretty optimistic that in the ESR expenses to sales ratio, these costs should be comparable to what we had, and the second question is about operational costs. Now looking in 2026, and the question is, what can the level of operational costs be next year? In Q2, that was just a single month, but in Q3, that will be August, September, and October, and during new season, we need to rent new warehousing stores, so those one-offs can be heavier, so to speak, but of course, this efficiency will be rolled further. in q2 that was just a single month but in q3 that will be august september and october and during new season we need to rent new warehousing stores so those one-offs can be heavier so to speak but of course this efficiency will be rolled further We had an efficient basis last year, so we are pretty optimistic that in the ESR expenses to sales ratio, these costs should be comparable to what we had, and the second question is about operational costs. we had an efficient basis last year so we are pretty optimistic that in the esr expenses to sales ratio these costs should be comparable to what we had and the second question is about operational costs Now looking in 2026, and the question is, what can the level of operational costs be next year? now looking in 2026 and the question is what can the level of operational costs be next year I believe that what we will have reached this year, we will not want to, of course, talk about that before we are sure what the guidance is for this year, because that will set the tone for the coming years. But the guidance resulted from our cautious approach. We are in the first year of this fast acceleration, such dynamic and expansion. So we see that we are finding our ways through it pretty well. We had to introduce certain optimizations like the one in June, but we are not afraid to make such decisions because it is, after all, quality and profitability of the entire business that we care about. So by the end of the year, we will have time to go through different strategies, and then we will give you the proper update. I believe that what we will have reached this year, we will not want to, of course, talk about that before we are sure what the guidance is for this year, because that will set the tone for the coming years. i believe that what we will have reached this year we will not want to of course talk about that before we are sure what the guidance is for this year because that will set the tone for the coming years But the guidance resulted from our cautious approach. but the guidance resulted from our cautious approach We are in the first year of this fast acceleration, such dynamic and expansion. we are in the first year of this fast acceleration such dynamic and expansion So we see that we are finding our ways through it pretty well. so we see that we are finding our ways through it pretty well We had to introduce certain optimizations like the one in June, but we are not afraid to make such decisions because it is, after all, quality and profitability of the entire business that we care about. we had to introduce certain optimizations like the one in june but we are not afraid to make such decisions because it is after all quality and profitability of the entire business that we care about So by the end of the year, we will have time to go through different strategies, and then we will give you the proper update. so by the end of the year we will have time to go through different strategies and then we will give you the proper update

Speaker 1: Further questions concern the repayments of Russian receivables. That's a question. Can you see the lack of possibility, lack of willingness for these repayments to progress? Well, I hope it will come as a soothing piece of information. There is a lot of will. Further questions concern the repayments of Russian receivables. further questions concern the repayments of russian receivables That's a question. that's a question Can you see the lack of possibility, lack of willingness for these repayments to progress? can you see the lack of possibility lack of willingness for these repayments to progress Well, I hope it will come as a soothing piece of information. well i hope it will come as a soothing piece of information There is a lot of will. there is a lot of will The data that we were given and on the basis of which we elaborated the new schedules are really accurate, and well, the company is our data, so it's only natural, but there is a lot of will on the side of the Russian party, and of course, we care to resolve an issue very much as well. The data that we were given and on the basis of which we elaborated the new schedules are really accurate, and well, the company is our data, so it's only natural, but there is a lot of will on the side of the Russian party, and of course, we care to resolve an issue very much as well. the data that we were given and on the basis of which we elaborated the new schedules are really accurate and well the company is our data so it's only natural but there is a lot of will on the side of the russian party and of course we care to resolve an issue very much as well This year we are in is the first year during which the company is working for its own purposes and account, and the model that we have in LPP is that the majority of major business fashion-related decisions are made in the center here, so of course, not having these competencies, the company in Russia had to build on its own, and they opened up a new chapter, a new business. They are learning how to make orders, how to file orders. This year we are in is the first year during which the company is working for its own purposes and account, and the model that we have in LPP is that the majority of major business fashion-related decisions are made in the center here, so of course, not having these competencies, the company in Russia had to build on its own, and they opened up a new chapter, a new business. this year we are in is the first year during which the company is working for its own purposes and account and the model that we have in lpp is that the majority of major business fashion-related decisions are made in the center here so of course not having these competencies the company in russia had to build on its own and they opened up a new chapter a new business They are learning how to make orders, how to file orders. they are learning how to make orders how to file orders We see that in their sales conditions in the part of LPP that they did get in the transitory period. Of course, they had more certainty in their operations. The working capital there well lost its dynamic somewhat, of course. Those who observe our results, well, you know that our payment period is 180 days plus for the goods. So the company in Russia was able to benefit from these periods. But now being a new business, well, in the majority of cases, the postponed payment periods were shortened by half. In some of the markets, they need to make that. We see that in their sales conditions in the part of LPP that they did get in the transitory period. we see that in their sales conditions in the part of lpp that they did get in the transitory period Of course, they had more certainty in their operations. of course they had more certainty in their operations The working capital there well lost its dynamic somewhat, of course. the working capital there well lost its dynamic somewhat of course Those who observe our results, well, you know that our payment period is 180 days plus for the goods. those who observe our results well you know that our payment period is 180 days plus for the goods So the company in Russia was able to benefit from these periods. so the company in russia was able to benefit from these periods But now being a new business, well, in the majority of cases, the postponed payment periods were shortened by half. but now being a new business well in the majority of cases the postponed payment periods were shortened by half In some of the markets, they need to make that. in some of the markets they need to make that But again, certainly there is a lot of will there, but also there are clear business-related reasons for what the situation is. Are there any other one-off events in your financial business activity apart from the ones concerning Russia? No, there are one-offs of those that we presented. But again, certainly there is a lot of will there, but also there are clear business-related reasons for what the situation is. but again certainly there is a lot of will there but also there are clear business-related reasons for what the situation is Are there any other one-off events in your financial business activity apart from the ones concerning Russia? are there any other one-off events in your financial business activity apart from the ones concerning russia No, there are one-offs of those that we presented. no there are one-offs of those that we presented But in our financial operations, there are two groups that pretty naturally grow. One is the interest from leasing, because this is the way they were modeled. So we rent all the new locations. So this IFRS part goes there. And it's natural that will grow with the volume of open stores. But the bigger group, the other bigger group that grew year on year in previous quarter, in the present one, and will keep on growing next one, financial costs. But in our financial operations, there are two groups that pretty naturally grow. but in our financial operations there are two groups that pretty naturally grow One is the interest from leasing, because this is the way they were modeled. one is the interest from leasing because this is the way they were modeled So we rent all the new locations. so we rent all the new locations So this IFRS part goes there. so this ifrs part goes there And it's natural that will grow with the volume of open stores. and it's natural that will grow with the volume of open stores But the bigger group, the other bigger group that grew year on year in previous quarter, in the present one, and will keep on growing next one, financial costs. but the bigger group the other bigger group that grew year on year in previous quarter in the present one and will keep on growing next one financial costs Our development, as you see, that situation is pretty comfortable, very comfortable. But this accelerated expansion, we had PLN 3.2 billion of resources gathered that we've now been consuming, and we use more of the loans that we had. And for the last two years, actually, there was no need for us to use that. And that means that the financial costs are higher. Our development, as you see, that situation is pretty comfortable, very comfortable. our development as you see that situation is pretty comfortable very comfortable But this accelerated expansion, we had PLN 3.2 billion of resources gathered that we've now been consuming, and we use more of the loans that we had. but this accelerated expansion we had pln 3.2 billion of resources gathered that we've now been consuming and we use more of the loans that we had And for the last two years, actually, there was no need for us to use that. and for the last two years actually there was no need for us to use that And that means that the financial costs are higher. and that means that the financial costs are higher But predicting what the next question may be, we are in the process of complex refinancing, comprehensive refinancing. We will focus on the implementation of our strategy in the perspective of three to five years. At the end of October, beginning of November, we will close this process. In Q4, the situation is going to improve. But predicting what the next question may be, we are in the process of complex refinancing, comprehensive refinancing. but predicting what the next question may be we are in the process of complex refinancing comprehensive refinancing We will focus on the implementation of our strategy in the perspective of three to five years. we will focus on the implementation of our strategy in the perspective of three to five years At the end of October, beginning of November, we will close this process. at the end of october beginning of november we will close this process In Q4, the situation is going to improve. in q4 the situation is going to improve

Speaker 2: Next question. It concerns like-for-likes in the third quarter still. It is about whether the like-for-likes grow mostly owing to the number of transactions or owing to the prices. I do not have this knowledge. Next question. next question It concerns like-for-likes in the third quarter still. it concerns like-for-likes in the third quarter still It is about whether the like-for-likes grow mostly owing to the number of transactions or owing to the prices. it is about whether the like-for-likes grow mostly owing to the number of transactions or owing to the prices I do not have this knowledge. i do not have this knowledge Concerning Q3, Sinsay oriented. Of course, we also see that our loyalty program, Sinsay Club, has been performing really well. Owing to this, our clients collect different kinds of points that they can later exchange for discounts. Owing to that, they buy more. Concerning Q3, Sinsay oriented. concerning q3 sinsay oriented Of course, we also see that our loyalty program, Sinsay Club, has been performing really well. of course we also see that our loyalty program sinsay club has been performing really well Owing to this, our clients collect different kinds of points that they can later exchange for discounts. owing to this our clients collect different kinds of points that they can later exchange for discounts Owing to that, they buy more. owing to that they buy more Our data show that the customer, the omnichannel customer, buys five times more than a single channel customer. Next question is about the warehouse in Romania. What is the plan as far as this warehouse goes? Are you going to rebuild that in the same location, or do you have a different plan? And when again would the operations be relaunched? This alternative is still being analyzed. We've been looking for a new location for our warehouse in Romania, whether it is going to be smaller or bigger. Our data show that the customer, the omnichannel customer, buys five times more than a single channel customer. our data show that the customer the omnichannel customer buys five times more than a single channel customer Next question is about the warehouse in Romania. next question is about the warehouse in romania What is the plan as far as this warehouse goes? what is the plan as far as this warehouse goes Are you going to rebuild that in the same location, or do you have a different plan? are you going to rebuild that in the same location or do you have a different plan And when again would the operations be relaunched? and when again would the operations be relaunched This alternative is still being analyzed. this alternative is still being analyzed We've been looking for a new location for our warehouse in Romania, whether it is going to be smaller or bigger. we've been looking for a new location for our warehouse in romania whether it is going to be smaller or bigger This is something that our logistics team has been working on, researching the market. But we were also originally planning to open another location in Romania, right next door, in relation to the location that, unfortunately, we lost in the fire. That will be around 66 square meters. And the full operation is planned for the beginning of November. This is something that our logistics team has been working on, researching the market. this is something that our logistics team has been working on researching the market But we were also originally planning to open another location in Romania, right next door, in relation to the location that, unfortunately, we lost in the fire. but we were also originally planning to open another location in romania right next door in relation to the location that unfortunately we lost in the fire That will be around 66 square meters. that will be around 66 square meters And the full operation is planned for the beginning of November. and the full operation is planned for the beginning of november That's going to be helpful, particularly in terms of e-commerce. As for the decision on whether we are rebuilding or renting a new location, well, the analyses are going on. We have around nine months, and we are trying to decide on the alternative in as short a time as possible. Another question about Romania, about insurance policy. In the business interruption insurance, is there a franchise so that the company covers the first few weeks or months, and it is only the consecutive period that is covered by the insurance? If so, how long is the franchise period? It was a very short one, days, not weeks or months, a matter of days, really. That's going to be helpful, particularly in terms of e-commerce. that's going to be helpful particularly in terms of e-commerce As for the decision on whether we are rebuilding or renting a new location, well, the analyses are going on. as for the decision on whether we are rebuilding or renting a new location well the analyses are going on We have around nine months, and we are trying to decide on the alternative in as short a time as possible. we have around nine months and we are trying to decide on the alternative in as short a time as possible Another question about Romania, about insurance policy. another question about romania about insurance policy In the business interruption insurance, is there a franchise so that the company covers the first few weeks or months, and it is only the consecutive period that is covered by the insurance? in the business interruption insurance is there a franchise so that the company covers the first few weeks or months and it is only the consecutive period that is covered by the insurance If so, how long is the franchise period? if so how long is the franchise period It was a very short one, days, not weeks or months, a matter of days, really. it was a very short one days not weeks or months a matter of days really

Speaker 1: Another question refers to investments in logistics and e-commerce and AI-based solutions. Are you investing in AI? Another question refers to investments in logistics and e-commerce and AI-based solutions. another question refers to investments in logistics and e-commerce and ai-based solutions Are you investing in AI? are you investing in ai Yes, we are investing in new solutions on a regular basis, whether contact center. We talked about many times before. This was the most clear area for investment. And in back office and in preparing our collections. And in e-commerce, yes, in presenting our products in Sinsay brand, especially on our websites, we are developing, improving such solutions. We are checking various new solutions in logistics. We have a system how to optimize our operations in the warehouses, how to provide stock for the stores based on AI. We also have one program based on AI in Poland. And we also have a program for our leasing managers looking for locations. Yes, we are investing in new solutions on a regular basis, whether contact center. yes we are investing in new solutions on a regular basis whether contact center We talked about many times before. we talked about many times before This was the most clear area for investment. this was the most clear area for investment and And in back office and in preparing our collections. and in back office and in preparing our collections And in e-commerce, yes, in presenting our products in Sinsay brand, especially on our websites, we are developing, improving such solutions. and in e-commerce yes in presenting our products in sinsay brand especially on our websites we are developing improving such solutions We are checking various new solutions in logistics. we are checking various new solutions in logistics We have a system how to optimize our operations in the warehouses, how to provide stock for the stores based on AI. we have a system how to optimize our operations in the warehouses how to provide stock for the stores based on ai We also have one program based on AI in Poland. we also have one program based on ai in poland And we also have a program for our leasing managers looking for locations. and we also have a program for our leasing managers looking for locations This is what we talked with Magda on many occasions. Our development model is based on local teams present in particular countries that are looking for non-obvious locations. Now they are supported with, well, big data or AI solution learning based on macro data and history, information about the traffic from mobile phones. This is what we talked with Magda on many occasions. this is what we talked with magda on many occasions Our development model is based on local teams present in particular countries that are looking for non-obvious locations. our development model is based on local teams present in particular countries that are looking for non-obvious locations Now they are supported with, well, big data or AI solution learning based on macro data and history, information about the traffic from mobile phones. now they are supported with well big data or ai solution learning based on macro data and history information about the traffic from mobile phones The teams can check the locations. We are analyzing that, and we are rationally approaching that. I can recommend you the article, I believe, it was in The Times where AI is reiterated in many aspects, and we focus on solutions that are bringing us measurable results. I can also recommend Sinsay app. When you go through that, you can look through the products, and you can see that the products are presented against a certain background or with the help of models. This is what we apply AI solutions. We shorten the time and costs, of course, related to organizing a photoshoot outside. The teams can check the locations. the teams can check the locations We are analyzing that, and we are rationally approaching that. we are analyzing that and we are rationally approaching that I can recommend you the article, I believe, it was in The Times where AI is reiterated in many aspects, and we focus on solutions that are bringing us measurable results. i can recommend you the article i believe it was in the times where ai is reiterated in many aspects and we focus on solutions that are bringing us measurable results I can also recommend Sinsay app. i can also recommend sinsay app When you go through that, you can look through the products, and you can see that the products are presented against a certain background or with the help of models. when you go through that you can look through the products and you can see that the products are presented against a certain background or with the help of models This is what we apply AI solutions. this is what we apply ai solutions We shorten the time and costs, of course, related to organizing a photoshoot outside. we shorten the time and costs of course related to organizing a photoshoot outside Another question refers to the competition. Do you see the increase in the scale of business when Shein is taxed, especially if we have smaller shipments? Another question refers to the competition. another question refers to the competition Do you see the increase in the scale of business when Shein is taxed, especially if we have smaller shipments? do you see the increase in the scale of business when shein is taxed especially if we have smaller shipments Well, that would be a certain balance of the rules of the game. In May, the United States did that. So they limited the de minimis parcels. That was $800, so EUR 150. So when we look at the prices from the Chinese platforms, this is above it. So this was a similar situation with Uber. So the taxi corporations were against it. So this is a similar situation. So we believe that all will compete on the same conditions. How many post-LPP stores are operating in Russia? Are these all? Do we have such knowledge about it? I think that most of these. I don't want to give you some false data. I don't have the exact numbers for you today. Well, that would be a certain balance of the rules of the game. well that would be a certain balance of the rules of the game In May, the United States did that. in may the united states did that So they limited the de minimis parcels. so they limited the de minimis parcels That was $800, so EUR 150. that was $800 so eur 150 So when we look at the prices from the Chinese platforms, this is above it. so when we look at the prices from the chinese platforms this is above it So this was a similar situation with Uber. so this was a similar situation with uber So the taxi corporations were against it. so the taxi corporations were against it So this is a similar situation. so this is a similar situation So we believe that all will compete on the same conditions. so we believe that all will compete on the same conditions How many post-LPP stores are operating in Russia? how many post-lpp stores are operating in russia Are these all? are these all Do we have such knowledge about it? do we have such knowledge about it I think that most of these. i think that most of these I don't want to give you some false data. i don't want to give you some false data I don't have the exact numbers for you today. i don't have the exact numbers for you today A question about inventories. How many are in terms of surplus per square meter? A question about inventories. a question about inventories How many are in terms of surplus per square meter? how many are in terms of surplus per square meter So when we look at 1800 and we recalculate it from our square meters, so this is more or less 7%-9%, I believe. So when we look at 1800 and we recalculate it from our square meters, so this is more or less 7%-9%, I believe. so when we look at 1800 and we recalculate it from our square meters so this is more or less 7%-9% i believe Now a question about a mini format. We talk about the Sinsay brand. What is the current assessment of this format and whether the project was abandoned in terms of mini Sinsay? Now a question about a mini format. now a question about a mini format We talk about the Sinsay brand. we talk about the sinsay brand What is the current assessment of this format and whether the project was abandoned in terms of mini Sinsay? what is the current assessment of this format and whether the project was abandoned in terms of mini sinsay No. We are looking at this concept. This was a great number of stores out of our pipeline. So we want to diagnose that correctly, how to increase sales in these locations. So we need, I believe, perhaps 8% of the increase from square meters. And these locations will prove good results. From the practical point of view, we were looking at this from the new season. Still, we were analyzing in August, and we've been testing that in September. And we are increasing trend versus price. So this first offer is a bit limited towards the fashion-related products. So from the 1st October, the tests will be fully operational. No. no We are looking at this concept. we are looking at this concept This was a great number of stores out of our pipeline. this was a great number of stores out of our pipeline So we want to diagnose that correctly, how to increase sales in these locations. so we want to diagnose that correctly how to increase sales in these locations So we need, I believe, perhaps 8% of the increase from square meters. so we need i believe perhaps 8% of the increase from square meters And these locations will prove good results. and these locations will prove good results From the practical point of view, we were looking at this from the new season. from the practical point of view we were looking at this from the new season Still, we were analyzing in August, and we've been testing that in September. still we were analyzing in august and we've been testing that in september And we are increasing trend versus price. and we are increasing trend versus price So this first offer is a bit limited towards the fashion-related products. so this first offer is a bit limited towards the fashion-related products So from the 1st October, the tests will be fully operational. so from the 1st october the tests will be fully operational With our next meeting, we will be able to share with you some results from that. Regarding Sinsay brand, as for categories, a woman, a child, or home is distinctive in terms of the popularity among the consumers or transactions, especially Back to School. In Sinsay Kids, we had significant increases. This year-over-year purchases related to going back to school was up. In total, I think business as usual, but the women, this is significant in terms of margin and number of products. Now home will be popular before Christmas because of the decorations. With our next meeting, we will be able to share with you some results from that. with our next meeting we will be able to share with you some results from that Regarding Sinsay brand, as for categories, a woman, a child, or home is distinctive in terms of the popularity among the consumers or transactions, especially Back to School. regarding sinsay brand as for categories a woman a child or home is distinctive in terms of the popularity among the consumers or transactions especially back to school In Sinsay Kids, we had significant increases. in sinsay kids we had significant increases This year-over-year purchases related to going back to school was up. this year-over-year purchases related to going back to school was up In total, I think business as usual, but the women, this is significant in terms of margin and number of products. in total i think business as usual but the women this is significant in terms of margin and number of products Now home will be popular before Christmas because of the decorations. now home will be popular before christmas because of the decorations Another question about refinancing. What is the expectation about refinancing related to the lowered costs of financing our group? I can't talk about specific figures, but, giving you some context, we address all the needs. Supplier finance, so reverse factoring, current financing, and current expenditure. The process is comprehensive. Another question about refinancing. another question about refinancing What is the expectation about refinancing related to the lowered costs of financing our group? what is the expectation about refinancing related to the lowered costs of financing our group I can't talk about specific figures, but, giving you some context, we address all the needs. i can't talk about specific figures but giving you some context we address all the needs Supplier finance, so reverse factoring, current financing, and current expenditure. supplier finance so reverse factoring current financing and current expenditure The process is comprehensive. the process is comprehensive This is done with a number of banks, very competitive. And at the end of the day, for us, stabilization is crucial. From this model, we had these bilateral models. We shift into more consortium-based structure, stable for many years ahead of us. So up to five years as for our strategic development. These financial aspects are going to be secured very well, which ultimately will help us refinancing our expenditure. We will improve our cash flow, and the payment of dividend will also be much smoother. This is done with a number of banks, very competitive. this is done with a number of banks very competitive And at the end of the day, for us, stabilization is crucial. and at the end of the day for us stabilization is crucial From this model, we had these bilateral models. from this model we had these bilateral models We shift into more consortium-based structure, stable for many years ahead of us. we shift into more consortium-based structure stable for many years ahead of us So up to five years as for our strategic development. so up to five years as for our strategic development These financial aspects are going to be secured very well, which ultimately will help us refinancing our expenditure. these financial aspects are going to be secured very well which ultimately will help us refinancing our expenditure We will improve our cash flow, and the payment of dividend will also be much smoother. we will improve our cash flow and the payment of dividend will also be much smoother That was the last question. Thank you for these questions. We would like to thank you also for your participation, and we will hear each other in December at the conference. That was the last question. that was the last question Thank you for these questions. thank you for these questions We would like to thank you also for your participation, and we will hear each other in December at the conference. we would like to thank you also for your participation and we will hear each other in december at the conference