LPP Group, which includes clothing brands Reserved, Cropp, House, Mohito and Sinsay, recorded in the third quarter of the financial year 2021/22, being from August to October of this year, PLN 817.3 million in operating profit and PLN 627.6 million in parent company net profit. A year earlier, the LPP Group had made PLN 301.2 million in operating profit and PLN 246.9 million in parent company net profit.
The group’s EBITDA in the third quarter of 2021/22 amounted to PLN 1.11 billion, compared to PLN 563 million a year earlier.
LPP took advantage of the delay in the request
LPP Group revenues amounted to PLN 3.91 billion, an increase of 60%. yy.
“Revenues up 60.0% y/y are the result of several factors: the continued return of customers to stationery after the confinement period and the implementation of the so-called +deferred demand+ system, the tireless trend of online purchasing preferences, the success of all-brand collections and the development of space of group sales and logistical adjustments” – LPP reported in the report
Gross margin on sales increased by 1.7pp to 58.3%. General and administrative expenses increased by 40.7%. up to 1.46 billion zlotys. On the other hand, cash flow from operating activities amounted to PLN 873 million, compared to PLN 685 million a year earlier.
Twice as much thanks to e-commerce
LPP Group’s revenue from online sales in the last financial quarter amounted to PLN 907 million, compared to PLN 446 million a year earlier.. In terms of three quarters, they increased year on year from PLN 1.45 to PLN 2.69 billion.
During the last financial quarter e-commerce accounted for 23.2%. total turnover of the LPP Groupwhereas a year earlier, it was 18.2%.
About 57 percent. the revenues realized by the group in the third quarter of 2021/22 were generated from abroad, revenues from Poland accounted for about 43 percent. Sales.
Quarterly revenues in Poland increased year-on-year from PLN 1.07 billion to 1.52 billion, in other European countries – from PLN 736 billion to 1.28 billion, and in the CIS region (former USSR countries) – from 634 to 1 PLN. 09 billion.
Sinsay has the most stores, overtaking Reserved in revenue
At the end of October, 2,125 stationery stores belonged to the LPP group. Following the development of recent years, the company’s largest network is Sinsay with 638 outlets.
The Reseved chain consisted of 448 stores, Cropp – 388, House – 360 and Mohito – 289. The company also had two factory outlets.
It achieves the highest revenue dynamics Sinsay – in the last financial quarter, sales of this brand increased from 543 million PLN to 1.33 billion PLN. As a result, Sinsay moved closer to Reserved, whose revenues increased from PLN 1.07 to PLN 1.48 billion.
Revenues from other brands are several times lower. Cropp’s quarterly income increased from PLN 321 to 415 million, House – from PLN 271 to 334 million, and Mohito – from PLN 213 to 338 million.
LPP rate above 10% at the top
Investors reacted positively to the financial results of the LPP group. On Thursday morning, the company’s share price on the Warsaw Stock Exchange rose by 11-12%. Until 11.30 a.m., the turnover reached PLN 60 million.
The main shareholder of LPP is the Semper Simul Foundation created by the co-founder and president of the company Marek Piechocki. It has values representing 31.25%. capital and 60.84 percent. vote at the general meeting of the company.
Good November sales for LPP
LPP believes that November was a good month in terms of sales. The period of Black Week promotions was successful, especially abroad, Vice President Przemysław Lutkiewicz informed. The company expects the supply chain disruptions to last a few more months.
“The fourth quarter started well. November was a good month for sales,” Przemysław Lutkiewicz said during the videoconference. As he added, Black Week was a success for the company, especially overseas. The promotions ran from Thursday, November 25 through Monday, November 29.
The vice-president recalled that last year stationery shops in Poland were closed on Black Friday, they were only opened the next day.
“If we compare the days when stores were operating a year ago and now, sales in Poland were not sensational, only a 10% increase. On the Internet, the increases amounted to 24%. – says Lutkiewicz.
“On the other hand, it was incredible overseas. The increases in physical stores over this multi-day period amounted to more than 80%, and on the Internet even more than 100%.” – added.
The vice president of LPP informed that from the end of November you can see an increase in purchases before the holidays. “We are seeing more traffic in stores, also on the internet. We are ready,” Lutkiewicz said.
The risk of containment is spread over many countries
At the same time, the company’s vice president did not rule out that the fourth quarter of 2021/22, i.e. the period from November to the end of January, could be affected by confinements due to the growing wave of COVID-19 infections. .
“We will probably be struggling with blockages. It should be noted, however, that about 40 percent. revenues are generated in Poland, and 60 percent. abroad – the risk is spread across many countries. (…) We have been dealing with lockdowns for two years, we got used to it as a company, “said Lutkiewicz. Currently, 97% of the group’s stores are open. Some stores in Slovakia are closed.
The stationary sales network of the LPP Group consists of 2,125 stores with a total area of 1,750.4 thousand square meters. m² in 26 countries. The online group is present in 31 markets.
The company announced opening of the stores of the 5 LPP brands in Albania in 2022/23. This will be the group’s 27th fixed market. Lutkiewicz informed that initially a few stores will be open there, a finally 30 to 40 fixed stores. An online store should also be launched over time.
The LPP group continues to see disruptions in the supply chain. “The disruptions in the supply chain are not diminishing, the return to normal is not visible. Transportation is problematic, so we have accelerated the production cycle. We are trying to upload our collections earlier” – said the vice president.
He added that the problems predicted by the market could persist over the next few months.
The LPP group is increasing salaries at its head office by 10%.
As Lutkiewicz informed, by decision of the LPP Board of Directors, Fr.in January 2022, all persons employed at the company’s headquarters will receive 10%. a salary increase. The company also announces a new commercial network compensation policy and the payment of semi-annual bonuses before the end of this year.
“We want to ensure the financial security of our employees in connection with high inflation. We also want to thank you for contributing to the development of the organization” – said Vice President LPP.
The LPP group currently employs 27,000 people. employees, of which almost 3 thousand. at the company’s headquarters.