4Q24 Results presentation

Описание: • LPP announces a new business strategy which focuses on accelerating the development of Sinsay. The brand will become the driving force of the Group and is expected to account for 75% of its revenue by 2027.

• By expanding its physical stores network to around 7,500 stores and increasing e-commerce sales to PLN 10bn, LPP intends to scale up its business and double its revenue to PLN 40bn within three years.

• LPP’s strategy is based on leveraging the competitive advantage of the Sinsay brand, with the strongest omnichannel platform on the market, which integrates an extensive sales network and a growing online channel, including the industry’s most popular mobile application and loyalty programme.

• In its new strategy, LPP focuses on smaller towns and responds to current customer expectations by creating a unique market category – Design&Value.

• Sinsay is the only brand on the market that combines the key features of modern commerce: proximity of well-designed stores, a strong online presence, a wide range of branded products, and affordable prices.

• Sinsay’s scalability and low market saturation open up the potential for the Company to reach 300mn customers in 27 target markets.

• By the end of 2027, Sinsay’s physical stores network will grow to approximately 6,000 stores. LPP has already secured over 1,100 new locations, which proves that the Company is well prepared for the rapid expansion.

• LPP bases its ambitious business plans, among others, on the results of 2024, which ended with a balance of over PLN 20bn in revenue (+20%. YoY growth in fixed currencies). The Group’s investments in this period exceeded PLN 1.8bn, the largest share of which was spent on expanding the sales network (+660 new stores).

Over 20bn in revenue in 2024, including record results in e-commerce

In its 2024 summary, LPP once again proved that ambitious development plans can go hand in hand with good financial results. As planned, the company opened over 660 new stores last year, and the chain’s floorspace increased by 23% YoY, with the Sinsay brand recording the largest increase in the number of stores. In line with earlier announcements, the company achieved revenues in excess of PLN 20bn (i.e. 20% YoY increase in fixed currencies and 16% more in reported terms) with record e-commerce sales dynamics of 31% YoY in fixed currencies and 26% in reported terms.

The Group’s operating profit exceeded PLN 2.4 bn, with a simultaneous increase in capital expenditure to over PLN 1.8bn. The main focus was on developing the sales network and strengthening the logistics and technological base, hence preparing the Company for a new chapter in its business strategy.

Business model tested and ready for rapid expansion

In its new strategy, LPP is focusing on accelerating the development of Sinsay, which will account for 75% of the Group’s revenues in 2027. Sinsay’s unique concept gives the Company the opportunity to quickly scale up its business and double its revenues to PLN 40bn.

Ready for rapid scaling, the Sinsay concept is a combination of two business models: fashion brand and value retailer. Its uniqueness stems from the combination of four pillars of modern commerce: availability of well-designed stores, strong support for the online offer, functional and aesthetic assortment, and a customer-friendly pricing policy. Over the past few years, LPP has been testing and developing this model in practice, and as a result, Sinsay has become a phenomenon in Central and Eastern Europe.

In line with the announced business strategy, LPP plans to quadruple the physical network of Sinsay stores over the next three years. By 2027, the number of Sinsay stores will have reached around 6,000 in 27 markets, and the entire network of the LPP Group will have grown to around 7,500 stores.

Large-scale retail in smaller towns

In its strategy, LPP aims to tap into the potential of smaller towns by introducing a new quality of retail and responding to the often overlooked needs of customers who expect access to a wide range of affordable, branded products and modern forms of shopping. Analyses conducted by the Company show that the level of market saturation in the countries where Sinsay operates is currently only 15%, which creates significant opportunities for further expansion and growth in the coming years. An important element of the development strategy is also the evolution of Sinsay towards a non-garment brand. Expanding the product range beyond clothing and adapting the product range structure to the store format and local needs allows the potential of smaller towns to be utilised and sales opportunities to be increased. Non-clothing products now account for as much as 50% of Sinsay’s sales, making it the first choice store for the whole family.