Welcome, Monika Przyborowska. Let me welcome you cordially to the conference of the LPP Group for Q2 of the present year. Today's meeting is going to be run by Przemysław Lutkiewicz, Deputy Chairman of the Board. Welcome. Marcin Bójko, Finance Controlling Director, welcome, and Magdalena Kopaczewska, Director for Investor Relations, welcome. Ladies and gentlemen, before we move on to talk about the results for Q2, we owe you a certain word of explanation. We decided to change the formula of our quarterly meetings with you. So far, we've held two conferences for you, on a single day, but at different times, one dedicated to representatives of the capital market, the other one for the media. This time, we decided to combine the two because we care for all of you to get precisely the same message from us and the same set of data, and for them to reach you at the same time. Another change concerning our conferences concerns the modification of the visual part of our transmissions. On your screen, so far, you've seen a presentation showing the results of the group, and right next to it, you saw the inside of our studio with the experts. We decided to resign from this video content for you in order to make it possible for you to focus on the results and the message that we passed. We hope that you accept both of these changes approvingly. How about at today's meeting? We'll start with our comment on the financial results for Q2 of the present year, and also year to date for the first half of 2024. We will also tell you about the most important events of this period and last week's, and then we will tell you about our plans for the rest of the year. We will explain whether they differ from what we announced during previous meetings. But the entire meeting today is going to end with a Q& A session that I will have the pleasure to moderate for you. You can ask your questions using the chat box that is already visible on your screen. It's active, so please do feel invited to pose your questions over the chat box. If on completion of our meeting, there are still some issues to be clarified, obviously, we are here for you, and you can reach us via our email boxes or telephones. So much from me. Let's move on to talk about the summary of the results for the second quarter of this year. Ladies and gentlemen, summarizing Q2 of 2024, we've reached over PLN 5 billion in revenue in the second quarter, an increase by more than 9%. Looking at our core business, omnichannel, we had double-digit growth of sales. Offline sales grew faster, 17.5% year-on-year, while online grew by 12% year-on-year, and we saw a very positive response to our summer collections by customers, particularly in Sinsay and House brands. Our gross margin was far better than, well, last year, and so it was 48% year-on-year. This year, it's almost 4.6 percentage points more. So this gross margin has been stable over the last year. We believe that in further periods, it's going to stick to similar levels. We have over 611 million operating profit, comparable to what we reached last year, and we had over PLN 1 billion of EBITDA, which is a growth by nearly 8% year-on-year. We also opened new stores. We have altogether 122 new stores, including 109 dedicated to Sinsay brand. Now, let us have a look at the beginning of the third quarter. It's been almost half this period behind us, so autumn and part of September, of course, we close it in October, and we see very positive response of the customers to our autumn collections, autumn/winter collections. The omnichannel sales in the period starting from the first of August to the 13th of September grew by 32% year-on-year in constant currencies. Particularly in September, we have similar growth, so, I mean, reaching nearly 40%, while over the entire period it was on average around 20%. We see positive like-for-likes in the entire group, around 10% in this period, and the largest increases concern the brands such as House and Sinsay, but also Reserved. We can also see that the behavior of our customers is very much dependent on the weather. When the colder mornings come, the sales grow quite substantially. When it's still warm, we can see that our customers refrain from shopping for winter or autumn. We certainly will see that when the cold period comes, we can expect an increase in sales of warmer apparel. We also have forecasts of the openings of our stores for the second half of the year and the entire year. We would like to open about 700 stores of all the brands, out of which 600 will be the ones for Sinsay, and 140 stores will be opened in the third quarter. Let's look at the slide presenting the distribution of our stores geographically. On the left-hand side, you can see a table, nearly 2,500 stores in our network, which is a year-on-year increase by 350 stores more than that. Most of that in the Sinsay brand, nearly 300, between 9 and 20 in the other brands. Look at the map now. On the right-hand side, you can see particular regions. The greatest increase in the number of stores is, of course, Southern Europe, 122 new stores there, Romania, Bulgaria, the former Yugoslavian states. This is where we've been developing fastest and where we also have solid financial results. Second place in terms of the dynamics of growth is Poland, 73 new stores, and the CEE region, that is Central and Eastern Europe, Czechoslovakia, Hungary, 69 new stores opened there over a year. We can say that it's been quite a substantial growth. We keep on developing across the entire region of Central and Eastern Europe. This is also where we see the greatest potential for our brands, particularly, of course, for the Sinsay brand. So here we can see the future in both the distribution channel, both the internet and offline, that keeps on developing pretty dynamically. Now, we are going to move on to the financial results for the second quarter. Good morning yet again. I'm happy to be able to talk to you during this results conference. Now, we will move on to the presentation of financial results, starting from the situation on the revenue side. In the second quarter, the sales in both channels, so both offline and online, grew by double-digit. We are particularly happy about the sales because when we look at it from the market perspective, so retail consumption was higher year-on-year, but the increases probably weren't as high as we expected at the beginning of the year. Additionally, we saw that the consumer earmarked some of the funds for services and rebuilding savings, so those double-digit growths are satisfying given that, and a 12% year-on-year growth in online sales. Here, generally, it was driven by further development of our mobile applications. This share in sales, online sales by applications, has been constantly growing. In Sinsay, it's been over 60% on average for brand, in Reserved, over 50%, and in the best mature countries where the application has been available for the longest time, it's been even up to 70% or 80%. As the offline channel goes, nearly 18% growth year-on-year, and here, the main source of growth was our systematic introduction of strategies, developing of stores in new markets, the openings of stores in this quarter, mostly in Czechoslovakia, Serbia and Italy, and this is mostly Sinsay. But additionally, year-on-year, we also observed a positive impact of like-for-likes. So in comparable stores, like-for-likes were positive as opposed to previous year. And in constant currencies, so the CC approach that we communicated in the first quarter, the offline sales grew by over 19%. So as we will see in a few slides to go, it grew faster than the development of the floor area. Now, we are moving on. We developed mostly outside Poland. Over 53% of the revenue was generated in foreign markets. The second quarter was a symbolic period, perhaps, because for a very long time, LPP was present in 39 markets as a group, and starting with this quarter, we have this round number of 40 markets. We opened a new Reserved store in Bahrain, but this is something you will hear more about in further parts, by Magda. So back to our slide. When we have a look at our three key markets, that is Poland, Central and Eastern Europe, and Southern and Eastern Europe, you can see that these are the three markets where we've been developing most dynamically, responsible for 90% of our income. The dynamics were nice in double-digit, Poland +14%, CEE plus, well, the slide says +3% of growth, but actually, when we corrected by the increase of currencies, which is zloty versus last year has been strengthening, that would be 11%. In SEE, +20 reported, +27 in constant currency. We can see that these dynamics were really strong. Our omni-channel model is based on two pillars, two legs. The first of them is, of course, the online sales. In the second quarter, it accounted for 24% of sales, and here as well, we have been observing double-digit growth. In the scale of the group, it was by 12% year-on-year in online sales. What did we do in terms of online sales? As signaled before, we've been mostly working on the applications, improving the so-called user experience, making sure that our clients can benefit from our applications, using them even more seamlessly, tapping their potential. And the most interesting things that we added would be the possibility of writing opinions, giving scores in our applications and websites. This is something that definitely is valued by our customers who like to offer their feedback. So there has been an increase in our popularity. It's very much in trends. The clients can observe those most popular elements of our collections. And something more technical but interesting is also you can see the status of your order, so you can track it right away. You can see where it fits into the logistic channel, and you can pay by means of PayPal. You will surely ask at this point, looking at the second quarter, you'll see that online sales abroad grew slower than in Poland. It was 6% and 13% in terms of constant currencies. But we had three major sources of impact here. First of all, the second quarter of 2023 was second strongest quarter in the year in terms of online sales, so we had this strong base, and this relative weakness of the consumer is something that I've mentioned already discussing one of the previous slide. It was seen in the scale of the entire Europe, actually, and the markets that in the first quarter performed weaker, Czechoslovakia and the Baltic States, also fitted into this trend. And this third thing that had an impact on it was that in recent months of the second quarter, we've been developing our logistics so we can see the demand, and we perhaps did not push sales so much because we wanted to get ready for being able to provide our services efficiently. And that is why we opened a new warehouse. That is the one in Bucharest that is dedicated to online orders. In the previous month, starting from May onwards, is something that we've used to our stock to prepare all the systems and to ensure servicing. This transitory period is over. The warehouse is ready, so now surely we will be in a position to ensure ever more seamless servicing of orders coming from the markets of Southern Europe so that our customers can take full advantage of our offering. The second pillar of omnichannel, these are, our brand stores, more than three-quarters of our revenue generated, and here in our core markets, we developed in two digits rate. Here you can see Central and Eastern Europe here and Southern Europe. They grew close to 25%. Overall, growth in floor space by 18.5%. So like I said, our sales in constant currency even faster than growth in floor space in this channel. Q2 closed at the level of 2.2 million sq m in floor space. So yes, every quarter we report these figures, how much space we have. In order to visualize it or to put it in context, we've realized that end of Q2, basically, our offline floor space is larger than the area of the Duchy of Monaco, so this is for you to visualize the scale. Now, the growth in sales came with very good financial results. Gross profit margin, 52.5%, 50.5%, higher than by 4.6 percentage points year-on-year here. The main impact came from lower purchase costs of collection, so our scale and diversification of suppliers have allowed us to achieve good results in this area. Now, speaking of gross profit margin, I would like to comment here or just re-emphasize this component that has been with us for nearly a year. Soon we are going to go to operational costs, operating costs. I would like to talk about sea freight, that this is not part of operating cost, it's part of gross profit margin. Just to restate, in September-October last year, because of the tensions in the Red Sea, basically every industry has to face this, the challenge of a longer route for deliveries from Asia. Ship owners don't use the Suez Canal. They have to travel around Africa. That takes more eighty days longer. For quite a long time, we have included it in our supply chain. This does not influence our collections, but like I said before, and on several occasions, ship owners have introduced some surcharges on fuel. Still, the cost of freight in the overall is about 3%. Even if we have higher freight costs in the current situation, we are still able to have a very good gross profit margin. Now, the costs of our primary core business, this is the own cost of own stores. Q2, very good level, a little above 4.4% growth in the cost per square meter. If we look at it from the point of view of the mandatory increase in minimum wages, it's 17% in Poland. We believe this is a very good result. Looking at the details, looking at the graph from the bottom, rental costs, Q2, PLN 62 per sq m, and that they have flattened compared to 2023. Two main influence factors that have shaped the cost are increased share of Sinsay. You know that Sinsay grows in smaller towns, in retail parks. These locations are cheaper, so with the growing share of this brand, our costs are sort of flattening out, and also, this has been contributed to by the strengthening of the zloty. You can see this growth of 12% per meter and of course, this obligatory, mandatory increase of minimum wages in the stores, and other costs, mainly cleaning and security services, but this is mainly contributed to by energy costs. And although unit prices have stabilized in the markets, we are still keep investing, and we equip our stores with telemetry, and we replace our lighting with LED lighting, so that's how we can really have measurable increases and benefits in terms of volumes year-on-year. At this stage, investment in this area has been already implemented in the EU, at European part of our network, but in the forthcoming periods, we are going to expand it onto other markets as well. Looking at costs, group wide, you can see 7% increase on square meter, and these increases, again, minimum wage, one of the factors, but given our dynamic growth, the launch costs have a say here. There are more stores. This machine is speeding up. We're going to tell you about, but in this fourth quarter, these launches will be intensified. You may imagine that a launch is connected to one-off costs, such as materials, hangers, et cetera, that we always have marketing costs in order to promote our new location. So these one-off costs are there, and there are relatively more of them because of that. And also, we develop new warehouses. One we've already mentioned, near Bucharest, and the second one near Bydgoszcz, Poland. So launching such big locations in logistics and warehousing, this requires one-off costs as well, and that happened in May and June, mainly. Again, this increased the base, the cost base, because last year we didn't have that. And on top of that, year-on-year, our objective is to have double-digit sales growth, especially in e-commerce. We, we do it by releasing budgets for online marketing, so we have an increase here by 40%. The coming quarters are higher in terms of revenue. We, we are always managing costs efficiently. Throughout the year, we expect to have the operating costs to revenue not higher than 40%. So to sum up, putting these results together, you can see that in Q2, revenue is over PLN 5 billion, generated at very good gross profit margin, 4.6 percentage points higher than last year. Operating EBIT, PLN 611 million, and EBITDA over PLN 1 billion. Yes, EBITDA is by 7.9% higher, so EBITDA is a good illustration of our positive flows from operating activity. Looking at half a year, revenue, PLN 9.3 billion, over 13% growth year-on-year, double digits here, like in Q2. The first half year very good gross operating profit margin close to four percentage points growth year-on-year, and EBIT more points over PLN 1 billion, and that gives us very high growth of net profit PLN 720 million, over 30% up year-on-year. Now, speaking of KPIs, operating indicators, the first one is stock levels. PLN 3.9 billion, that's how we've finished last year. Per square meter, it's almost 1,820 zlotys per square meter, 5% growth year-on-year. Is this level, which is higher, a concern to us? Not really. We expected that. We are developing intensively. We're opening new warehouses in Romania and near Bydgoszcz, Poland. This is a natural trend. So in this intensified period, where we have intensified growth, this level will be a little higher, but like towards last year, when we get the target value of the floor space, this level will again be cut back to the level that we had previously. And it also shows us that in terms of inventory is, it's okay. Our turnover, just 134 days, a little higher year-on-year. And if we look at receivables rotation, we have 180 days. This is quite comfortable day. Q2, a very good result here. So you can see that over PLN 750 million released year-on-year. So a positive result on cash flows. And on the right-hand side, you can see a commentary on the main indicators. The turnover, you can see, in terms of inventory and payment terms for receivables and trade liabilities, quite similar or even better to the previous year. All these good results translate onto a safe situation in terms of our debt level. Q2, PLN 4 billion in Net Debt, and we had lower usage of long-term bank loans. Cash was better, PLN 2.4 billion. Sorry, yes, PLN 2.4 billion, and we have not included PLN 0.8 billion in money market funds. So, the debt that is increasing is the financial lease debt, but given our growth and new lease contracts, this is a natural direction, which is progressing together with the development of our network. Generally, the net debt to EBITDA is one. That's the ratio. Last year, it was 1.3, so this debt area is sort of being released somewhat, but the situation is quite comfortable here. And we are also going to buy our bonds at the lowest amount of PLN 300 million. This good situation and good flows have also allowed us to efficiently perform our development plans. In Q2, our CapEx according to plan, in Q2, more than PLN 400 million in CapEx, most of that dedicated to the development of our offline network, more than PLN 250 million. That is an 11% growth year-on-year, and the PLN 148 million, which you can see marked in yellow on the left-hand part of the slide, that was dedicated to the developing logistics, PLN 107 million. And this direction is also going to continue, so we are going to develop our logistics assets in the coming quarters. Half year closed at the level of PLN 687 million, so that shows a good ratio, a good rate of growth in order to perform our forecast for the whole year. So there's PLN 1.5 billion of CapEx. So to sum up financial situation after the first half of the year, had double-digit sales results, good management for costs that translated nicely onto higher cash flows. And that's why we are in a good position for the coming periods to continue with our development plans. And now we'll move on to the main corporate events in the second quarter. Traditionally, August and September mark the start of the new autumn collections, Back to School and Back to Office. And as a few years ago, we were still able to see a clear effect of Back to School, that is the peak in sales for the last few days of August and the beginning of September, when the school year begins. Currently, and actually it's been the second year in a row, we have not seen this effect. But we can see a huge impact of weather on the purchases of the Back to School collection and on how they spread over time. That is why this year, having had the experience of the previous year, the first models from the Back to School collection were introduced to the stores, as so-called intermediary or transitional models, or even summer-like models, T-shirt, shorts, leggings. These really sold well. We can see that parents also waited to change the apparel and introduce the warmer ones later on. They have only started selling on colder days or actually colder mornings. So the impact of the weather on the Back to School sales can be clearly spotted. What supported to the sales of the Back to School collection is also a good choice of licensed models. We had LSD or Minecraft or Hot Wheels. We also noted in that period a 30% growth year-on-year in group sales. That was as much as 46% in Sinsay. But in terms of the division into online and offline channels, in that period, online had a greater dynamics than offline. Still talking fashion, a few words about the Reserved brand. What we are very happy to see is that Reserved is regaining its good shape. We can see a very positive response to autumn collections, particularly female line, women, particularly boho or preppy. That shows that the collection was well-received by our female customers. Additionally, this positive response has been impacted by the right pricing and an improved structure of the collection. That means that there is the right share of the basic models to the more fashionable ones, and this is what we've been working on, following our experience with the SS collection in the Reserved brand. The Reserved brand store was launched in a new country and in the new market that is in Bahrain, as already briefly mentioned today. This is the fifteenth store of the Reserved brand in the Middle East, which means that we've just added the fortieth market to the group of our markets. It's been open in the Marassi Galleria Center, and it offers both women and men collection. All the time, we've been also developing e-commerce, and that means that it is necessary to expand our warehousing backup facilities dedicated for this channel. That is why, as already mentioned, we have opened two new warehouses in the second quarter. These are the fulfillment center-like warehouses. The first one is located in Bydgoszcz, the other one in Romania. The first one is our biggest fulfillment center now, whilst the other one, the one in Romania, is our second fulfillment center in this country. A value added to the fulfillment centers is their location. They are located very close to distribution centers, and the distribution centers supply our fulfillment center warehouses that are dedicated to e-commerce. In both the warehouses, we've used AI solutions, which certainly will shorten the delivery time and also, step by step, we've been introducing mobile robots to our centers. In the fourth quarter, we are planning to introduce sorters that are going to help the dispatch process and order the products per particular orders. We, of course, remember about sustainable development solutions like photovoltaic panels in these warehouses or the rain water recovery systems. So much in terms of the events that we wanted to share with you, and now we are moving on to the outlook. I guess I've mentioned that already, but let me repeat that we have a positive outlook for 3Q. We can see very strong sales of our collections, both Back to School and Back to Office, and those that are being introduced now, so the new elements of the autumn/winter collection. Very good growth, over 30%, year-on-year in the group's revenue from the period from the 1st of August to the 20th of September, and as I mentioned, 21% we had of growth in August, but as much as 38% in September. Certainly, we also hope for very good sales in October, and we stick to our plans of expanding our store network. Over 140 new stores of all brands will be opened in the third quarter this year. Now, when you look at the slide that I'm displaying, you'll notice the very ambitious plans we had for the entire year, but the second half marks many more stores to be opened in order for our target to be attained. So we've had question whether it is possible to actually open over 450 stores in the second half of the year. That means that with 140 being opened in the third one, it means that we leave nearly 300 stores to be opened in the last quarter. So what are our plans? Ninety, these are our plans of Sinsay stores to be opened, 110 in December, and 115 in January. These are Sinsay stores, of course, already contracted. We have already furniture ordered. We've got all the services the builders, and so on. So these are our plans, and that's the challenge that we are facing. 620 Sinsay stores by the end of the year, that's the plan. Of course, we want to open them for the year and close our plan reaching this number, so that all together with the other brands, we will have 700 stores all in all. And the goals for the coming years are equally ambitious because actually, we are planning growth by 20% of our floor space every year for the coming two years, even three years, perhaps. And now, just a moment, and a few words on online, our mobile applications in particular. Now, we can see that online sales have actually moved to the applications and in the mature markets where applications have been available for a while now, like in Poland or Romania, we can see that the applications generate even as much as 80% of the total sales revenues, leaving only 20% of the shopping to be done via desktops and computers, PCs, or laptops. In the case of Sinsay brand, 70% of the online sale is generated by mobile applications, and that is why we've been working so hard now on developing and rolling out these applications to our new markets. Right at the bottom of this slide, you can see that we have our applications in 10 countries already. We've been rolling them out, Sinsay and MOHITO ones in particular, to our new markets. But, an important thing to mention, and that's good news, is that next month, in October, we are going to launch an application also for the Cropp and House brands. So that means that we will have applications covering all our brands, and of course, we are going to roll them over to those markets that have the greatest potential. And in the nearest period, we believe that these applications, on the one hand, will keep generating big revenue and reduce marketing costs, thus contributing to a clear increase of online sales and profitability of this distribution channel. And ladies and gentlemen, the last slide in this part of our meeting, we stick to our targets announced at the beginning of the year, the financial targets for the entire year. That is, group revenues should reach between PLN 20 billion and PLN 21 billion. We stick to the gross profit margin plan between 52% and 53%. We want our operational cost to revenues to be below 40%, for the entire year. And of course, being more detailed about offline revenues, we see positive like for likes and further very dynamic increase of our floor space. So these revenues should also grow fast. But we can see that in the last quarter, offline has actually accelerated. I'm eager to see which distribution channel actually will have a greater dynamics, because it is really positive in both. We also stick to our plans concerning our CapEx. As Marcin has mentioned, PLN 1.5 billion, that's the plan of CapEx, for this year, out of which only PLN 1.2 billion for stores. Also, here, we stick to the goal of keeping our safe debt level and financial liquidity so as to be able to develop safely in further periods. Thank you very much for your attention, and now we invite you to pose your questions. Question number one: What impact on the high LFL indexes and year-on-year growth from the first of August to the 22nd of September is in the low base of the last year? What would you be satisfied in terms of- What kind of values would you want to see for this year? You can remember that, September last year was very warm. All the companies from our industry actually complained that the customers waited to buy the autumn collection models because very warm September means that nobody wishes to buy warmer jackets. But actually, did our homework, and actually this year already, we had a lot of summer models for our clients available in August and September in our stores. So climate change and the changes in the behavior of our customers, of course, are taken into consideration, and yes, we do keep adjusting. Yes, the low base from the last year means that this year, these growth, although these are really impressive, of course, we are hungry for more so that our investors are also satisfied. So looking a bit further ahead, looking at October, so the end of this quarter, I believe that the minimum that it satisfy us, because October. Well, for October to be good, would be 20% growth year-on-year. I think that is the minimum that we would expect, but we would like it to reach even 25%-30%. We will see the basis is strong, the collection is well-received, the warehouses are ready, the collection is already in stock, so I certainly hope for the good, strong end of the third quarter and a very strong Q4. In the first quarter of this year, the impact of constant currencies for the Capital Group contributed to the drop from 25.5% to +18.3% in the revenue. In the second quarter, despite zloty not being that strong year-on-year, the impact of constant currencies reduced the revenue by 28.8%, so actually more than in the first quarter. What does such a big negative impact of constant currencies result from in the second quarter? As regards these indices, we looked at the differences in percentage point, and in the first quarter, it was over 7%, percentage point. Now it was around 4%-5%, looking at the level of the entire group. What does it result from? Zloty, when you look even at the main currencies or relation to euro, systematically has been growing in strength. So the third quarter last year, actually, this level was about 4.45%, 4.50%. Starting from November last year, it's been comparable. So this impact and normalization of this impact started with the end of the fourth- is expected from the end of the fourth quarter of this year. But let's remember that LPP, as a group, is present in a few eastern markets as well, so you would have to break down these currencies to see, well, what the situation is in Czechia or Hungary. Maybe not typically eastern directions, but they have other currencies than euro, different ones. So to this, we have Macedonia. So this is quite a big pool, but looking at those numbers, well, this is what we expect. So starting from November this year, this impact should be much lower. Staff costs grew in the second quarter by around 7%. What is the share of it? What share of it is due to the increased cost of the minimum wage, and what are expectations as to the rest of the year? The cost of minimum wages, of course, grow in all the markets, not just in Poland, so that's quite a factor, and they have a huge impact on SG&A costs. We expect the situation to stabilize in the third quarter and fourth quarter. Now, let me put it this way: We've done a lot of optimization moves in terms of how to work in our stores, how to optimize the processes, so as to minimize the impact of minimum wages onto our total costs. After many quarters, it appears that we have reached this spot. In which it is harder to keep on optimizing the processes because they've been already measured very well, analyzed very well. Now, it seems that the time has come for the increase in minimum wage to be reflected in our SG&A costs accordingly. There are a few percentage points increases in wages year-on-year, but looking at the total P&L of us and the total cost, we can see that, right, these costs and services costs, energy costs, all these costs are stable. That is why we believe that this cost discipline is going to be upheld, and this index that we've talked about, so 40%, so the cost of SG&A to sales should actually be preserved at the level at the current level. It, together with increase in Sinsay stores, the marketing campaign compared to revenues is effectively cheaper. It's easier to promote the brand. What is the influence on the Sinsay sales? What is the influence of offline stores? Yes. We have noticed that just opening the store, Sinsay brand stores, does not require any of extra financial outlays because the concept is very familiar in the market, so we are operating, and additionally, offline stores promote online sales as well for Sinsay, so I'd say that we are observing less need to spend money on marketing because the strength of the brand, the familiarity of it, the recognizability of it, because it's in so many places, this means that our customers come to us on their own, so there is this generic traffic at a very high level. On top of that, the app, which allows, them to experience, purchasing in omni-channel, if, if they're part of the club or they are in the loyalty program, various promotional sales, prize draws. In Sinsay, both these channels drive each other, which it makes us very happy because the growth- there's growth in sales while minimizing marketing costs. Now, we spend about 8% to 9% on marketing. There's 8% to 9%, if we look at the e-commerce sales. We want to gain new customers, but that's just in the new markets where the brand is not as well known. Could you tell us a bit more about the, sales of, autumn and, winter collection sales? At what point does it- Is there a peak of sales regarding the temperature? Yes, that's a very good question. Climate change, right? September, August, September, there is a big change in approach to collections. Just some years ago, in September, people were buying warm jackets. There were warm clothes. Now, we can't do it because they won't sell, basically. We can see that October and September are now starting to be the months where we have a little less sales, and the biggest sales impact comes in October, November, when that's when jackets, sweaters, jumpers begin to sell, especially in the brands dedicated to children. That's when we buy more clothes for children, when they go to school, to kindergarten, and in terms of value, these this clothing is more expensive, higher margins. Yes, October, November, these are the two months where in recent years we have been observing significant growth in sales. Now, the contribution from trade agents, when will they go to the level of zero in the purchasing structure? Like we said in the previous yearly conference, just we are going to continue with agents just until next year, just until the end of this year. Next year, it will be zero. I understand that the sales for Reserved are improving. Why? Do you have better prices, better collections, a stronger customer who can buy more products? Please comment. Yes. So the autumn collections in Reserved are very well received, like for likes for August, 5%. For this brand, you can see September; it's even higher, so there's a nice rebound there. On the one hand, we have more basic collections in Reserved, and so we put a premium on hits there. And we adapt the collection to the weather situation. So August, September, just like end of summer, very well received, and we are also counting on good sales for the winter collection. Generally, there are a lot of changes in Reserved. I think that we have been drawing conclusions from what has not succeeded. We are learning from our mistakes, and like Magda has said, we are adapting prices to the market reality. In Reserved, the prices need to be a little lower, but overall, the collection has to be fashion-based, but also the clothes need to be able to be worn on a daily basis. You talked about 30% growth in constant currencies from August to 2/3 of September. What is your estimation in terms of zlotys? Yes, like Marcin has said, in month to month, there is a difference between this expression in constant currencies and zlotys, but this is decreasing. 32% is from the 1st of August to 20th of September. I think the difference is just about three percentage points. Yes, yes, we have. It's between 3.5 to 2.5, so you can see that this difference is decreasing. So in zloty, that will be about 28% exactly. In the forthcoming near future, are you planning to issue bonds in zloty and euros? You talked about in 2022, 2023. Now, looking at our good financial situation and cash flows, we don't have such plans. The comparative base in Q1 is quite good, 55.8%, as SG&A share in sales is about below 37%. It seems that it will be difficult for you to match this in Q3 this year. Please comment. Right. This margin was quite high last year, indeed, but what we are seeing now, these levels are comparable or just a little lower. So from this point of view, we are being optimistic. Like Przemy has said, the positive LFL show that these collections are improving, especially in Reserved. You can see an improvement there. In terms of the cost, the seasonality is higher. October, September is very good, October should be quite also very good in sales. Like we said, the increase in these costs will be managed effectively and maintained on the level that is comparable quarter to quarter. We are optimistic here. Let's wait for the communications there, but there will. We don't-- we're not expecting a simple arithmetic drop here. In your opinion, the freight prices, how can they shape over the year? How can they affect prices? And the next question is about a different topic. Right. We have been discussing freight costs many times, depending on our negotiations with shipowners, and we are starting these negotiations in October, and we would like to sign long-term contracts on good terms, price terms for us. You realize that we buy high volumes in transport, that's why our prices are lower from spot market prices. But there will probably be some increases. In the black scenario, we were calculating that if the prices increased by 30%, then there will be 0.4% decrease in the margin. But in the blackest scenario, 50% growth in freight, there will be 0.7% drop in the margin, in the profit margin. The increase in the freight costs, which will happen, will be reflected slightly on our margins, but we still believe that we can supply, have these margins of 52%-53% long term. The dynamics that you quoted in Back to School are expressed in constant prices or reported prices. Back to School is reported in constant prices. Like you commented before, if we clear the influence of the prices, the dynamics is about 28%. The next question: If possible, please provide LFL data for Q2 this year. In terms of like for likes, for Q2, they were positive, slightly above 3% for all brands. Here, Sinsay was close to double digit positive values. In terms of House, very high double digits, positive double digits, and the remaining brands were below zero, but that was just a little below zero. So overall, over 3%, with negative like-for-likes last year. Thank you. The next question, cash flow and factoring. This looks quite poor. Will the company keep using factoring? Yes, this is being put very strongly, but reverse factoring was introduced in 2017, I think. It works very well to us, and we would like to keep using this tool because it's a win-win for three parties: for the suppliers, who can cash their invoices on a banking platform, banks make money on it, and we have longer payment terms. So we would like to keep using this solution. Why this 166 new Sinsay stores in the first half year does not correspond to other sources, whether it says 154 stores. Yes, 154 is net stores, that is minus closures. 160, there are new openings, new launches, so while communicating that we have want to have 700 new stores this year, that's what we will do. But you know that to us, this is business as usual. We will close the old stores that don't perform as well. So every quarter, we close about 20 older stores, so you need to consider whether these qualitative values are net or gross. Could you present your plans for the Reserved brand? Are you planning any investments? Q1 indicated negative dynamics. What, how does it look like for Q2? Positive, like-for-likes in Reserved were not positive yet, but in Q2, we can see positive like-for-likes, about 5%. Not investments, especially, we are not planning that, but we are working on improving our collections to adapt them to the tastes and preferences of Central Eastern European clients, to become better, be better positioned among our competitors, to improve our collections, to have better sales, to have a positive like-for-likes, and to have better e-commerce sales. And of course, all this is related to changes in the logistics with extra warehouses, availability of the goods. I'd say that we are not planning any revolutionary changes, but evolutionary changes, of course, yes, and we can see that they're already bringing positive results. Why in the Serbian online Sinsay store there are so few items dedicated to home, such as kitchen appliances, plates, et cetera? Yeah, well, the reason is that we didn't have enough warehousing locally. Magda and Marcin talked about it today. We have developed our store warehouses in Romania. They will have a bigger product portfolio for those markets. That's why we have been expanding there, so I believe that soon it will change and the offering will be much wider. Can you estimate the costs of one-off costs of launching two warehouses? How did it influence SG&A? A dozen or so million zlotys, one-off, not a lot compared to SG&A, which was PLN 2 million altogether. The one-off costs are not high, but you need to remember that these are not our warehouses, so in the next periods, there will be the release costs and the staffing costs. So the cost of using these warehouses will be definitely higher than those one-off costs. Does LPP have to re-rent one of their stores in shopping malls that belong to associated entities? Perhaps someone. Well, a long time ago, we had these special purpose vehicles that were renting stores for us in shopping malls, but no, we are not renting any such space. Is the Semper Simul Foundation the owner of any shops in Poland? No. What is the influence of factoring in the first half and second quarter of this year? I apologize. Could we go back to Semper Simul. Yes, Semper Simul Foundation. Does the Semper Simul Foundation own any real estate in Poland or anyone else where LPP rents space? Semper Simul Foundation has its own companies, it's the daughter companies. They are the owner of hotel network. They have some retail parks in Poland. Yes, it is possible that LPP is using a retail park, retail parks that that belong to Semper Simul companies. We can see a change in trajectory in Q3. The internal measures from the company, how much do they help, and how much does the market environment help you in it? I think that actually both is the case. In the second half of the year, you can see greater consumer expenditure. We hope that from the beginning of this year, the consumers' expenditures would be higher, which did not happen, but now it appears that the consumer is ever stronger in terms of expenditures, but on the other hand, we are expanding the Sinsay offer. We are adding applications. We are expanding our offer by also adding new warehouses that show the customers in the new market a broader product portfolio. We have changes in the Reserved collections. A lot of activities we take up in order to increase the sales, so I believe that I guess more depends on us than on external factors, after all. How about the profitability of your stores in Western Europe? Pretty well. In Germany, the stores are doing well. They're not so good in the U.K. In Italy, it depends which brand, because Sinsay is doing rather well, but Reserved, not so good. So it depends, and basically speaking, Western Europe markets are hard markets for us. That is why we are not planning any strong expansion on those markets there. Rather, we focus on certain Central and Eastern Europe and Southern Europe. How about paying liabilities? It's about the receivables that you expect from the Russian company and how much of the assets are frozen. We now discuss, talk about, around PLN 800 million. That's, for the company, so for the stores and for the goods. But there is the schedule, and actually, we get, the money from the investors, as scheduled. You say that much lower normal costs of purchasing of the collection introduce the gross margin profit, and also, you owe it to lower promotion activities and the currency exchange rates. Can you tell us what, w- in what proportion they impact, your, results? Well, the proportions are not even. The main positive impact, as I've tried to comment, resulted from lower costs of collection purchasing, the strengthening zloty supported us when purchasing, dollar purchasing of collections. But last quarter, we started applying constant currencies. So here, the impact of a better purchasing price expressed in zloty was offset by a lower price of selling, but was still slightly positive, but not- It wasn't as strong as the effect of lower purchasing prices expressed in dollars. But, lowered cost of promotion activities constituted about half of this effect, I'd say about 50%. So that was the distribution in the second quarter. In terms of the 3% of costs concerning additional payments for the fuel, how do you compare it to the previous year or quarter? I guess the 3% of, well, it might have been misinterpreted. So the fuel addition, percentage-wise, might be slightly higher. I can't remember what it is in relation to the freight cost, but the 3% that you've heard of was expressed in the context of the share of freight costs in our cost of purchasing goods. So the 3% is relatively a very small share in the entire cost of purchasing of our collections. Now, we would like to understand the depreciation of zloty in the gross margin? When you think about the exchange rate, dollar to zloty, the cost of 4.5. It was as far as the summer collection, 4.05. So the appreciation of zloty to dollar helps us in making the collection have a more accessible price-wise, cheaper. But the strong zloty versus Central European currencies also means that the revenue is somewhat lower, and that is why we started talking about selling in constant currencies that actually are not impacted by current exchange rates. But nearly half of the sales actually are realized in the Polish market, but the appreciation of the Polish zloty to dollar is actually favorable to us. What are additional costs related to the launching of e-commerce warehouses in the second quarter? As mentioned, several million zlotys. By how many millions zlotys in the second quarter performance marketing costs increased compared to the second quarter of last year. By around PLN 30 million. The prospects for the current quarter are promising, but in the previous presentation, you also gave a positive outlook. Omnichannel sales from the first of May till the tenth of June increased compared to last year by 19% in constant currencies. But in the end, results proved to be worse, PLN 5 billion of revenues in the second quarter, and an increase by 9.4% year-on-year, in constant currencies by 13.2%. What was the reason for that, and what makes you so optimistic about the situation not repeating itself this time? Yeah, that second quarter was pretty weak in terms of the end of June and July. Didn't go as planned, but how can we be sure that this time is going to be better? Because October and those colder days of September show us that the weather has a significant impact here for the sales, and we also look at the historical record, at the data. Autumn shopping is always very strong. We believe that this year, again, October will be a very strong month. You run a broad expansion in Central and Eastern Europe and Southern and Eastern Europe. Are you planning to open further warehouses and distribution centers of Poland? Yes, we have such plans developing very dynamically, Sinsay brand and its network. We, of course, need to catch up with logistics. So yes, we do have plans for further warehouses beyond Poland, but it's too early to talk about that. You opened the first store in Bahrain. In further quarters and next year, are you planning to accelerate the expansion of your brands on the Middle East markets? We have some plans of opening new stores, but this will be single stores, like a few stores a year. So it's not much on our scale, given how many Sinsay store we open. How much of SG&A per square meter could be ascribed to the cost of the future periods? In other words, what would these costs, SG&A per square meter, would look like if you did not intensify Sinsay and online new stores, and if you grew at a pace that would be lower than currently? Well, probably we would have to take some more time and consideration and go through our Excel sheets to answer this question because it's a rather detailed question. But this impact, just to maybe visualize that, the first two, three months, right after the opening and first two, three months before the opening of the store, these are the periods where we incur a bit more costs. But quickly after the second month, the costs stabilize, they drop on monthly average by 20%-30%, so that's the scale. So I guess we would have to calculate that exactly to be able to give you an answer and the impact. 185 days of rotation of liabilities, is that something that you are aiming at? Where did this increase come from? Well, we want the liabilities to be over 180 days, so that when we have a good rotation of inventories at the level of 130 or 120 days, we can have a negative working capital, which means that we generate cash for the company this way. Such a long term or lengthening of those terms to 180 days or more, actually, results from using reverse factoring. Maybe one more point to mention, please draw attention to the fact that in our liabilities, we have not just the paying for the goods, but also what we owe to construction companies for building up of our stores, so we have more liabilities. We, in this index, this consolidated index, we relate it only to the costs of buying goods. So it might be somewhat contaminated as an index, but I think in the long run, it shows, right, what we have, so, a negative working capital. Could you share information on how gross margin behaves from the 1st of August to the 20th of September, compared to the third quarter of the previous year? Of course, in August, at the beginning, we have a sales period. This margin is lower, but then it quickly rises by the end of August to the levels, to the target levels, when the new collection enters the store. So we talk about reaching the margin of about 60% and then keeping it for September, October, depending on the product mix and the brands, but it's around 60%-62%. So looking also at last year, well, I guess these levels of margin will be rather similar. We showed you one graph today that showed that the margin was low, starting from the third quarter, 2022 to the second quarter of 2023, then it moved up. And we can see that at those higher levels, 53%-54%, this is what should, we should stick to in the best quarters of the year, so in the third and fourth quarters. Can you tell us how the cash desks, the self-service ones operate? Yes, we do offer them in the Sinsay brand. We've been testing them in some 30 stores. They work really well in terms of the customer being able to provide service for themselves and how little time it takes. It also reduces the demand for employees in those stores. But we haven't calculated the impact because we wait for the data on inventory losses that are related to those self-service checkouts. We need to wait to sum up the project so as to be able to draw conclusions and to share the financial results with you. Could you tell us a bit more about mobile applications for Cropp and House? In how many markets will you debut them? As always, we launch only in Polish market, in our native market, where at that, at that point, we keep working on it, improve it, check for errors, so that's a silent go, so to speak, without any significant promotional campaigns. Once we see that everything's working well, then we start with marketing, and I think definitely, it's going to be like this. This time, just the Polish market first, and then next year it will be launched in other markets. Do I understand correctly that when there is no investment in stores, profits in Q2 this year would have been higher by PLN 400 million? Please repeat. Do I understand correctly that if there were no investments in new stores, the profit in Q2 would be higher by PLN 400 million? Around. No, not so much. The profit would have been higher without, if we haven't invested in stores, but new stores give profits as well, so it's not so one would contradict the other. Let us put it differently. If there were no one-off costs for regarding store launches and then depreciation, then the profits would be high, obviously. But long term, the profits from those new stores they have very quickly become profitable, and they become higher than the costs that were outlays that were spent on launching these stores. So no, new stores give us higher, much higher profits, and that's the way we do it. Your growth is mainly Sinsay value for money segment. The average values per piece sold is much lower than in Reserved. It's not going to be a challenge in the future years for your profitability? Not so much. Well, you're right that the prices are low, so the gross margin is lower than for Reserved, but the operational costs for the Sinsay concept are much lower. Let me remind you, we open up in smaller towns, in retail parks, not in large shopping malls, where the rental cost is much higher. On the other hand, the cost of building and operating a Sinsay store are lower than a Reserved store, so lower depreciation costs as well. And we try to manage these processes in such a way that at the end of the day, the profitability of a Sinsay store, percentage-wise, is like in Reserved stores. I have to admit, this does work. That's why we are so eager to develop further, to open more Sinsay stores. That's because they're so profitable, and long term, of course, it builds, profits for us and value for our invest- our shareholders. In the fashion industry, are you seeing a trend to no longer use, human models towards AI? Yes, it has begun already, we might put it this way. Looking at how we use, yes, use it in our apps. AI helps us create photos of models against various backgrounds, in various configurations. So yes, this is, has already started, and I think that they are going to continue. It, to s- what extent, online, acceleration can be related to, costs, outlays on marketing, and to what extent to apps? There is a ceiling for marketing spending. Of course, you can spend any kind of money for marketing, as you well know, but on the other hand, that's for performance marketing. But you have to look at it from the point of view of how sensible, reasonable it is. We have variable budgets, depending on the market, and we buy more or less clicks through Google or Facebook, of course. But if we see that a lot is spent on performance marketing doesn't give us appropriate return in consumer purchases, then we don't spend any more. So there is a natural cap in the market, which stems from the economic sensibility of those, the spending. And here, the app is helping us out because it is a much more graceful marketing tool. Because, first of all, we already have a customer who uses this app, and through the app, we can encourage them, through various loyalty programs or promotional sales or competitions, to buy more frequently in our store. And we are seeing that this is working. That's why we are so eager to invest in apps. And this will probably allow us to maintain marketing budgets at a much lower levels than before. Labor costs in SG&A, what does it stem from? What does this increase stem from quarterly? Well, mainly in terms of labor costs, the biggest contributing factor of this growth is the mandatory wage increases because of the minimum wage, 18% growth in Poland. And you can. Obviously, these costs of wages are not standing still like in other markets, but there were much lower values there. So this was the main factor, and additionally, given our growth, of course, the launch, new launches of new stores, this is what we have been observing mainly, but we are always working on our teams who work towards this growth. Hindenburg report this year, has it influenced consumer trust in any way? No, we haven't noticed such an influence. No, it, we believe not. There's a significant acceleration towards the end of the year and early next year. The new grow, new shop, new stores, the pressure on the EBIT margin, will it be higher in 2025 than this year? Yes, it's a good question. You can see our plans that we are planning to have even more stores, Sinsay stores, 620 new stores this year. There will be some closures, so the net values will be a little lower, but for next year, we have 800 new stores for Sinsay planned. So of course, the costs related to these launches will be included in our P&L, but these stores accelerate and generate profits, and they will support our P&L, too. So I'm sure that nominally speaking, the values for profits and turnover will be higher. In terms of percentages, if we have the indicators like we have now, I think we will be quite happy. Of course, the scale of our business, the effect of scale that is already appearing, well, we believe that we can increase our profitability even more, but even the levels that we have now are satisfactory. Please comment on the changes on your creative team. Creative director and head of concept design left. These two people left. Have they been replaced with new personnel? Not so much because we have reorganized these creative departments. We wanted to focus more on those creative people to be closer to the products and our designers. So the position of head designer was replaced, so was sort of broken down into other positions. What is the dynamics of revenue in PLN from the 1st of August to the 20th of September? 28%. And here is a question about the sales, selling of the Russian business. We have talked about it a little, but there is another extra detailed question. What is the situation of settlements with the owners in the selling of the Russian business? Are you expecting any problems? Is there a plan to halt the trade agents' purchases to Russia? Yes. Yes, this year we are planning to discontinue these sales with the new investor. In terms of the payments of those, our receivables from the investor, everything is being paid as per the schedule. And what were those receivables at the end of Q2? PLN 600 million for the goods, and for the stores, PLN 500 million. Partially, it's been already included in our balance sheet, so now we have the balance sheet value of stores, PLN 250 million right now. Guidance, the gross margin per year, given the reporting, the reported data, what does it come from, and what factors can influence the margin negatively in the next half year? Do you think that you exceed your guidance gross margin? Yes, this is a sort of a tricky question. Yes, the certainty that the scope of our margin that we have been guiding, 52%-53%, this is what we achieved in Q1 and Q2, so we are on the safe side here, and we have two best quarters ahead, Q3 and Q4. So yes, we are certain that we can stay within this range of our gross margins. Are we going to go beyond? Yes, I would like to go beyond, and there is quite a good chance that we can do that, to move up, move higher. Have you considered including a self-service checkout for Sinsay brand? Yes, and we have already done it, and we have a testing, and we are now looking at, waiting for results of those tests. It looks positive. What behaviors have you noticed? Is there any caution for purchases in offline or online? The average shopping cart, is it higher, lower? Please comment. At this point, we can see an acceleration in sales, looking at August, September, and that happens in the online channel, so e-commerce, much higher dynamics than offline, but the growth of our offline channel also gave us big, nice increases. I think that the customer is much more prone to spending money than in the first half of the year. How about optimizing the work in your store to, in order to minimize the costs? Is it about reducing the staffing or? No, no, no, it's not about reducing the staffing levels. We are talking about the right management of the working hours. Of course, when there is the biggest traffic in the shopping malls, in retail parks, that's when we need to have more staff in the stores. The transport companies are helping us get the products, the goods onto the shop floor. So we try to simplify these processes. There is a dedicated team in our company, and they are calculating the time with stopwatches. They look at every process on the shop floor, with unpacking, with servicing the customers. We try to manage these processes in order to save on human labor as much as possible, so that as much as possible can be done outside of the store. What's your assessment of your competitors, the Chinese platforms? Are they your biggest rival, or are there bigger competitors? It depends on the distribution channel. Definitely, the large Chinese platforms online are a very demanding competitor. They are very aggressive in terms of marketing, but we can see that their share in the market goes up to a certain level, and then it's difficult for them to go higher than that. This market is highly fragmented. There's room for everyone. Looking at our concept of the Sinsay brand, the width of our offering, and the price levels mean that we can compete very well with those Chinese players. Besides, we have shorter lead times, delivery times, and better quality of our products, so Sinsay will look very well in this fight. In terms of offline stores, not much changes there. We have the same competitors, and we are one of the best developing companies in this regard. What niches today give you a possibility of increasing your market share? We saw discounts on children's collections in- Is this a direction for you or quite the opposite? I'd say there was a certain seasonality here. Looking at purchasing of kids collection, when it's getting colder, say, the few last days of September that we had or October soon to come with many cold days, then you'll see kids collection selling much better. Women collection sells all the time very well, but when it becomes even colder or we are getting into the winter period, then you will see men's collections, men hitting the stores. So we can see the seasonality that is repetitive. This is a pattern that repeats itself, so we all need to be present in all these areas of the market. But responding to the question on which brands or which- I'd say that those cheaper products, and when we look at Sinsay, additional elements like accessories, home products, or hobby-related items, these are the items that keep on selling better and better. We cannot say that we are focused on apparel only, but we also take into account the broad interest of the market and also other categories of products, and we keep on expanding also these elements of our portfolio. The plans concerning the openings are growth plans. How does it relate to the floor space? This is the end of this year, net or gross. Let me put it this way. We always say how many stores we want to open, and we are planning, of course, the construction companies, lighting, furniture, and sign contracts. But we can never really tell you how many stores we will close, because that depends on how a given store performed, when the contract expires. And the question right to the end, even if the store did not perform well, then changing the contract, are we in a position to actually prolong it? Or maybe we can sign it with new conditions and terms. So the negotiations are on whether to prolong a contract and keep the store on. So naturally, we are going to give you our targets expressed in gross numbers, so how many new stores we will open, but we cannot really predict what the net result of the closing stores will be at the end of the year. Does the group in its stores plan to also introduce a sporting portfolio, for example, sporting apparel and appliances? Yes, but, we would like to tell you about that as, it's in the pipeline. The plans are, being prepared. When we are ready with the plans, we will share it with you. How are the discounts in the stores of the LPP Group, have they been seen in the market? As I said, they, were smaller in terms of their scale year-on-year. The promotional scales, were, run on a smaller scale. The Reserved brand performed somewhat worse, as we've mentioned, so that is why this promotional activity was somewhat deeper, but that was a minimal scale still. In Sinsay, it was much better year-on-year, so in total it was, say, two, three percentage points better year-on-year. How about, the impact of the flooding on LPP? Did it hit your stores? To what extent? What losses have you incurred? Well, we've actually checked the impact of the flooding onto our stores. It is marginal. Currently, we have only four stores in Poland that were destroyed in Poland and one in Czechia. So altogether, five stores were hit. Of course, they are insured, so there will be no loss here, and the five stores do not weigh much in the entire network of ours, so these losses are really minimal. Media informed about increased controls on the German border. Did that affect the company in any way? Does it affect us? No, no, we didn't have any negative coverage here and negative impact on our business. Ladies and gentlemen, that was the last question in our Q&A session. I need to admit that we've received plenty this time. Thank you very much for all of those. I hope that we've provided you with a sufficient clarification. If not, if there is anything else that comes to your mind, as mentioned at the beginning, please get in touch with us over phone or email. Let me thank you with- thank you for accepting our invitation to our today's results conference. Well, nothing's left for us to say but invite you to another one in December. Thank you very much for today, and we wish you a very good day. Goodbye. Thank you.