Q2 2026 LPP SA Earnings Call

September 17, 2026

Speaker #1: We apologize for the slight delay; we've all suffered, ed, unfortunately. Some technical glitches occurred that we couldn't have predicted. Hopefully everything will go right.

Speaker #2: Every place truly begins with a tourist. One line. One idea. A whole world comes to life—filled with wonder, powered by imagination, ready to explore.

Operator: This message is being recorded. Every great story begins with a drawing. One line, one idea. A whole world comes to life. Filled with wonder. Powered by imagination. Ready to explore. Draw, dream, discover.

Speaker #1: Marcin Bojko, CFO, is going to run the meeting today together with Magdalena Kopaczewska, investor relations director. Ladies and gentlemen, our today's meeting is going to start with a summary of two Q26.

Speaker #1: And for the first half of the year, but we would like to proceed to referring the results of operational changes that we introduced into the Sinsay brand and that we announced 3 months ago during the previous results presentation.

Speaker #2: Draw. Dream. Discover.

Speaker #3: It's been a busy day. Yeah, I'm heading out of work now. See you in the evening.

Operator 2: It's been a busy day. Yeah, I'm heading out of work now. See you in the evening.

Speaker #1: That took place in June. These are the modifications that were introduced to increase the sales potential of the brand, the first results are already visible, and this is what we would also like to share with you today.

Speaker #1: We will also refer to our current financial targets for the current year and the all-entire meeting is going to be completed with a Q and A session.

Speaker #1: You have a chat box window to use, and this is something that will be available to you throughout the meeting. Do feel encouraged to ask your questions.

Speaker #1: We will, of course, be at your disposal via media apps, LPP.com, and also the contact to investors relations LPP dot investor dot relations at LPP dot com.

Speaker #1: This station is Q10.

Speaker #1: So much from me, ladies and gentlemen. Let us proceed to the summary of the results for the second quarter. Thank you. Good afternoon. Without further ado, let us go straight to discussing the results.

Speaker #1: The summary of the second quarter. In the second quarter, we opened 230 new stores in the first half, 351 openings, of all the stores in all the brands, including 314 in the Sinsay brand.

Speaker #1: So we are following the revised plan that we announced when we met you. Last time, which means that by the end of the first half we had over 4,000 stores in the entire group, including nearly 2,700 in the Sinsay brand.

Speaker #2: Every place truly begins with a tourist. One line. One idea. A whole world comes to life. Filled with wonder. Powered by imagination. Ready to explore.

Speaker #1: And we are acting to our plan. Quite certain that by the end of the year we will have over 3,000 stores in our youngest brand that is Sinsay.

Speaker #1: The development of offline stores began not the only initiative that we've been implementing officially at the beginning of September. We launched our marketplace also in the Sinsay brand.

Speaker #2: Draw. Dream. Discover.

Speaker #3: It's been a busy day. Yeah, I'm heading out of work now. See you in the evening.

Operator 2: It has been a busy day. Yeah, I am heading out of work now. See you in the evening.

Speaker #1: Now the platform has been operational in Poland only, but it is still a very early stage. We'll keep developing it. At this early stage, what matters to us most is for this development to be a quality development, well thought over, for the products that we offer enjoy the results of synergy so that they can contribute to what we've been already offering within the Sinsay brand.

Speaker #1: And this is how we are going to operate in the months to come. The first results show that the further we look into the future, the greater the platform is going to be.

Speaker #1: Over half a billion spent on investments in the second quarter. Most of it is Capex investment. Expenditure concerning the openings of new locations, but as much as in 2025, most of our investments go for logistics in the second quarter.

Speaker #1: This station is Q10.

Speaker #1: 150 million and an important piece of operation related information. By the end of last year, we launched a fulfillment center in Romania in July, a distribution center in Romania so that our second location, which means that we are fully operational in terms of assets in Romania.

Speaker #1: After the fire that we suffered, because these two locations are replaced, what we lost in the fire. So we have those assets in Romania.

Speaker #1: We start improving our operations, shifting certain operations from Poland to Romania, first because go to Constanța. So we are shortening the transportation route that goes straight to Romania, to the newly opened DC, and the target markets are already get the deliveries.

Speaker #2: Every place truly begins with a tourist. One line, one idea—a whole world comes to life. Filled with wonder. Powered by imagination. Ready to explore.

Operator: Every great story begins with a drawing. One line, one idea. A whole world comes to life. Filled with wonder. Powered by imagination. Ready to explore. Draw, dream, discover.

Speaker #1: Lead times are also improved. We have shortened the lead time quite considerably, which is good news. We are operationally very efficient. Our business efficiency is also good news, but what is even better news is the result in the second quarter.

Speaker #2: Draw. Dream. Discover.

Operator 2: It has been a busy day. Yeah, I am heading out of work now. See you in the evening.

Speaker #3: It's been a busy day. Yeah, I'm heading out of work now. See you in the evening.

Speaker #1: 1.7 billion in EBITDA, 1.1 on operating profit, and nearly 800 million of net profit. From 40 to 50 percent of growth at any level, so a very good quarter.

Speaker #1: Of course, what we were supported by was macroeconomic situation, strong slotting, but these conditions were there, but we needed to know how to make use of them.

Speaker #1: We know how to manage our prices and margins across all the brands. Therefore, we enjoy such great results that we can both. This is the fifth quarter in the row with an improvement of profitability.

Speaker #1: A bit more detail on how we made it happen. And we will start with sales traditionally, second quarter, 18% of growth on revenues, nearly 19% in the first branch, the stronger one.

Speaker #1: This station is Q10.

Speaker #1: So the offline stores and over 16% of increase in online sales and particularly online sales following the hard first quarter marked by poor history, just to remind you, rebounds very nicely from plus one in the first quarter to plus 16 in the second.

Speaker #1: That's a very sound level that we would like to stick to moving on. As for the regions, the online sales grew everywhere at a more or less similar good pace in terms of offline stores, LFL, also from quarter to quarter.

Speaker #1: So compared to the first, difficult quarter rebounds and was positive everywhere. Just one remark here, southern Europe, also noticed improvement, but in the first quarter that was minus point and a half.

Speaker #1: Now it's minus four and a half. You can see that this dynamics, this negative dynamics is the only one in the region sustained Romania keeps improving, but anyhow, what we are focusing on is to keep on operating, be the best in the hard market conditions.

Speaker #2: Every place truly begins with a tourist. One line. One idea. A whole world comes to life—filled with wonder, powered by imagination, ready to explore.

Operator: Every great story begins with a drawing. One line, one idea. A whole world comes to life. Filled with wonder. Powered by imagination. Ready to explore. Draw, dream, discover.

Speaker #1: So we are very active about our offer. And about our logistics, certainly that will bring results. Now, looking at like for likes as such, another piece of good news following two quarter quarters and negative LFL results, we have plus 1.8 at the group level.

Speaker #2: Draw. Dream. Discover.

Operator 2: It's been a busy day." "Yeah, I'm heading out of work now. See you in the evening.

Speaker #3: It's been a busy day. Yeah, I'm heading out of work now. See you in the evening.

Speaker #1: So return to positive dynamics. In terms of brands, Sinsay minus 1.2. I believe that it is for the first time that we can really say that the minus one minus 1.2 is not comparable with minus 1.67 because, well, we did face certain challenges concerning our offer, but now we started the sales early on, making space for the autumn offer, equipped with the knowledge that we are rich in now, knowing what August and September sales might look like.

Speaker #1: Minus 1.2 fits into our expectations. As much as we worked in this quarter, with the products, we know that it is important to keep the margin strong.

Speaker #1: This station is Q10.

Speaker #1: So everything now is heading in the right direction following the sales period. The remaining brands, five and four, and reserved our second biggest brand, eight quarters in a row with very good positive like for like dynamics.

Speaker #1: And what is also source of our satisfaction is that our smaller brands, house and crop, for four quarters now have noted positive dynamics concerning like for likes and crop in the last quarter has even reached really high.

Speaker #1: Single digit or low double digit results. So really nice. Another component that keeps shaping our result is cross margin. Was profit margin, as I mentioned, 3.7 percentage point over the previous year, sustained trend from the first quarter.

Speaker #1: That was four and a half point. And the strong slotty. You can see it in the comments, 3.6 versus four at this time of the year, but macro is not the entire result around half a point of this effect.

Speaker #2: Every place truly begins with a tourist. One line, one idea—a whole world comes to life. Filled with wonder. Powered by imagination. Ready to explore.

Operator: Every great story begins with One line, one idea. A whole world comes to life. Filled with wonder. Powered by imagination. Ready to explore. Draw, dream, discover.

Speaker #1: Was something that resulted from our efficiency, our price management, particularly in the sales season. And as far as macro is something that we cannot control the entire market is doomed to rely on exchange rates.

Speaker #2: Draw. Dream. Discover.

Operator 2: It's been a busy day. Yeah, I'm heading out of work now. See you in the evening.

Speaker #3: It's been a busy day. Yeah, I'm heading out of work now. See you in the evening.

Speaker #1: We do have one hundred percent influence on the effective management of SG&A costs. So what we the work we carried out last year now gives results.

Speaker #1: We have lean basis and we can again both the drop of costs per square meter as well as versus profit. Now, revenue is the greatest component is this logistical capex that I mentioned at the beginning.

Speaker #1: It performs really well in terms of opex. So that means that we keep increasing our efficiency and quality of our operations. And those return periods really are now reduced to the window of a few months.

Speaker #1: This station is Q10.

Speaker #1: We can see that reflected in opex. And the other big leverage is the increasing share of the Sinsay brand. This concept pretty naturally in terms of stores and the cost of stores constitutes a greatest group in terms of our P&L.

Speaker #1: Is lower. So the more Sinsay stores we have, the lower the cost per square meter are. And also it is worthwhile taking a look on something that Monika mentioned right at the beginning.

Speaker #1: We have a number of initiatives. We planned them in June. We will show you the status, but looking at performance marketings and buying advertisements online, that constitutes a high group of costs.

Speaker #1: And with our good profits and the lean cost basis, we now see that the moment has come to spend a bit more on performance marketing.

Speaker #2: Every place truly begins with a tourist. One line. One idea. A whole world comes to life—filled with wonder, powered by imagination, ready to explore.

Operator: Every great story begins with a drawing. One line, one idea. A whole world comes to life. Filled with wonder. Powered by imagination. Ready to explore. Draw, dream, discover.

Speaker #1: The July changes in the European Union concerning subsidies for Asian platforms through Europe product line. At the beginning of July, we did not see the results and this what we expected in May last year when similar regulation was passed in the US, the full rotation also took a while.

Speaker #2: Draw. Dream. Discover.

Speaker #1: Starting from August, we have started noticing the changes in our e-com dynamics. That's the good moment to increase expenditure on performance marketing. So in Sinsay, a percentage points in opex versus revenue is greater is about a half of a percentage point across the entire group.

Operator 2: It's been a busy day. Yeah, I'm heading out of work now. See you in the evening.

Speaker #3: It's been a busy day. Yeah, I'm heading out of work now. See you in the evening.

Speaker #1: So we are investing from this base into the costs, but in the coming period, certainly we can see the positive results in traffic. Customers traffic sales.

Speaker #1: And this is something that will surely bring positive results in the coming quarters. When we put all these elements together, what we get is what you see.

Speaker #4: Good afternoon. Monika Przeborowska here. Let me welcome you to day two of the results presentation for the LPP Group. We apologize for the slight delay; we've all unfortunately suffered.

Monika Przebrowska: Good afternoon, Monika Przebrowska. Let me welcome you for today to the results presentation of the LPP Group. We apologize for the slight delay we've all suffered. Unfortunately, some technical glitches occurred that we couldn't have predicted. Hopefully, everything will go right. Marcin Bójko, CFO, is going to run the meeting today together with Magdalena Kopaczewska, Investor Relations Director. Ladies and gentlemen, our today's meeting is going to start with a summary of Q2 2026 and for the H1 of the year. We would like to proceed to referring the results of operational changes that we introduced into the Sinsay brand and that we announced 3 months ago during the previous result presentation that took place in June. These are the modifications that we introduced to increase the sales potential of the brand.

Monika Wszeborowska: Good afternoon, Monika Przebrowska. Let me welcome you for today to the results presentation of the LPP Group. We apologize for the slight delay we've all suffered. Unfortunately, some technical glitches occurred that we couldn't have predicted. Hopefully, everything will go right. Marcin Bójko, CFO, is going to run the meeting today together with Magdalena Kopaczewska, Investor Relations Director. Ladies and gentlemen, our today's meeting is going to start with a summary of Q2 2026 and for the H1 of the year. We would like to proceed to referring the results of operational changes that we introduced into the Sinsay brand and that we announced 3 months ago during the previous result presentation that took place in June. These are the modifications that we introduced to increase the sales potential of the brand.

Speaker #1: So very dynamic and strong growth in profit and profitability. After the first half year over 3 billion EBITDA over 1.8 billion in EBIT and 1.2 in terms of net profit.

Speaker #4: Some technical glitches occurred that we couldn't have predicted. Hopefully, everything will go right. Marcin Bujko, CFO, is going to run the meeting today together with Magdalena Kopaczewska, Investor Relations Director.

Speaker #1: So record levels, a huge increase in profitability, a really strong foundation built after the first half of the year. So now pretty comfortably in terms of financial situation, we are entering the autumn and winter season and we can focus on business initiatives and delivering good collections and continuous improvement of our efficiency.

Speaker #4: Ladies and gentlemen, today's meeting will begin with a summary of Q2 2026 and the first half of the year. We would then like to proceed to refer to the results of operational changes that we introduced to the Sinsay brand, which we announced three months ago during the previous results presentation.

Speaker #1: Out of the record profit we finance investments in terms of capex after the first half is over 1 billion slotties. And as mentioned, over a half of this billion is the stores over the first six months and over 440 is logistics.

Speaker #4: That took place in June. These are the modifications that we introduced to increase the sales potential of the brand. The first results are already visible.

Marcin Bójko: The first results are already visible, and this is what we would also like to share with you today. We'll also refer to our current financial targets for the current year, and the entire meeting is going to be completed with a Q&A session. You have a chatbox window to use, and this is something that will be available to you throughout the meeting. Do feel encouraged to ask your questions. We will, of course, be at your disposal via media@lpp.com and also the contact to Investor Relations, lpp.investor.relations@lpp.com. So much from me, ladies and gentlemen. Let us proceed to the summary of the results for the Q2. Thank you. Good afternoon. Without further ado, let us go straight to discussing the results. The summary of the Q2. In the Q2, we opened 230 new stores.

Monika Wszeborowska: The first results are already visible, and this is what we would also like to share with you today. We'll also refer to our current financial targets for the current year, and the entire meeting is going to be completed with a Q&A session. You have a chatbox window to use, and this is something that will be available to you throughout the meeting. Do feel encouraged to ask your questions. We will, of course, be at your disposal via media@lpp.com and also the contact to Investor Relations, lpp.investor.relations@lpp.com. So much from me, ladies and gentlemen. Let us proceed to the summary of the results for the Q2.

Speaker #4: And this is what we would also like to share with you today. We will also refer to our current financial targets for the current year, and the entire meeting will be completed with a Q&A session.

Speaker #1: Now, versus the entire year, the cape expend on the stores will of course result from the number of openings and in terms of logistics, similar amount, maybe somewhat less is going to be spent over the years.

Speaker #4: You have a chat box window to use, and this is something that will be available to you throughout the meeting. Please feel encouraged to ask your questions.

Speaker #1: The guidance for this year is two and a half billion capex for 2026. This is something that we stick to. As for the balance and the stock level and the balance, 100, 1,633 slotty per square meter, we are entering now the autumn winter season.

Speaker #4: We will, of course, be at your disposal via media@lpp.com and also through our investor relations contact at lpp.investor.relations@lpp.com. That's all from me, ladies and gentlemen.

Speaker #1: We had to buy more products and mid-September we will have reached this level. Our stocks are starting from the end of September. October this level will gradually return to the benchmark, but 1,500, 1,600, that's the stock level per square meter that we would like to work with in the coming periods.

Speaker #4: Let us proceed to the summary of the results for the second quarter. Thank you. Good to discuss the results. The summary of the second quarter.

Marcin Bójko: Thank you. Good afternoon. Without further ado, let us go straight to discussing the results. The summary of the Q2. In the Q2, we opened 230 new stores.

Speaker #4: In the second quarter, we opened 230 new stores. In the first half, that’s 351 openings across all stores and all brands, including 314 in the Sinsay brand.

Marcin Bójko: In the H1, 351 openings of all the stores and all the brands, including 314 in the Sinsay brand. We are following the revised plan that we announced when we met you last time, which means that by the end of the H1, we had over 4,000 stores in the entire group, including nearly 2,700 in the Sinsay brand. We are acting to our plan. Quite certain that by the end of the year, we will have over 3,000 stores in our youngest brand, that is Sinsay. The development of offline stores, these are not the only initiatives that we have been implementing. Officially at the beginning of September, we launched our Marketplace also in the Sinsay brand. Now the platform has been operational in Poland only, but it is still at the very early stage. We will keep developing it.

Speaker #1: But of course, we also make sure that in the second quarter we have an improvement, 157 days against 176 day last year. The situation in all the brands looks very comfortably in terms of this inventory.

Speaker #4: So we are following the revised plan that we announced when we met you last time, which means that by the end of the first half, we had over 4,000 stores in the entire group, including nearly 2,700 in the Sinsay brand.

Speaker #1: Turnover good profit and good inventory management are also good financial and cash flow results. In terms of liquidity, improvement year over year, net debt a bit net debt a bit on leverage on level one.

Speaker #4: And we are acting according to our plan. We are quite certain that by the end of the year, we will have over 3,000 stores in our youngest brand, which is Sinsay.

Speaker #4: The development of offline stores is not the only initiative that we've been implementing. Officially, at the beginning of September, we launched our marketplace also for the Sinsay brand.

Speaker #1: Improvement year overall as well. Very comfortable level and a graph that is not very pleasing looking at our results. Is the improving operational workflow.

Speaker #4: Currently, the platform has been operational only in Poland, and it is still at a very early stage. We will keep developing it. At this early stage, what matters most to us is that this development is of high quality and well thought out, so that the products we offer benefit from synergy and can contribute to what we have already been offering within the Sinsay brand.

Speaker #1: We spend a lot on capex, more than 3 billion last year and 10 and a half billion this year. So this year we will finish the record period for the extents of capex, the large investment program.

Marcin Bójko: At this early stage, what matters to us most is for this development to be quality development, well-thought over for the products that we offer, enjoy the result of synergy so that they can contribute to what we have been already offering within the Sinsay brand, and this is how we are going to operate in the months to come. The first results show that the further we look into the future, the greater the platform is going to be. Over half a billion spent on investments in the Q2. Most of it is CapEx investment expenditure concerning the openings of new locations. As much as in 2025, most of our investments go for logistics in the Q2, PLN 150 million. An important piece of operation-related information, at the end of last year, we launched a fulfillment center in Romania, in July, a distribution center in Romania.

Speaker #1: We also pay dividend. We also are at the maximum level of the payment of dividend. We are also able to operate a very stable financial fundament foundations.

Speaker #1: The cash flow is improving. The closer we get to the end of the year, and in 2027, we expect permanent increase of cash and we will know we will be comfortable with financing the cash six months through good results, comfortable situation in terms of cash flow and working capital and very good liquidity situation that is improving as well.

Speaker #4: And this is how we are going to operate in the months to come. The first results show that the further we look into the future, the greater the platform is going to be.

Speaker #4: Over half a billion spent on investments in the second quarter. Most of it is Capex investment. Expenditure concerning the openings of new locations, but as in 2025, most of our investments go for logistics in the second quarter.

Speaker #1: That was about the last six months, but we are also in the middle of the third quarter, so we will also as always look at what we see in the data at the beginning of the autumn winter is back to school season and I will ask Magda to discuss the details of that specific period.

Speaker #4: 150 million, and an important piece of operational information—by the end of last year, we launched a fulfillment center in Romania. In July, a distribution center in Romania.

Speaker #4: So that's our second location, which means that we are fully operational in terms of assets in Romania. After the fire that we suffered, these two locations replaced what we lost in the fire.

Marcin Bójko: That is our second location, which means that we are fully operational in terms of assets in Romania after the fire that we suffered because these two locations replaced what we lost in the fire. We have those assets in Romania. We start improving our operations, shifting certain operations from Poland to Romania. Those deliveries go to Constanta. We are shortening the transportation route. It goes straight to Romania, to the newly opened DC, and the target markets already get the deliveries. Lead times are also improved. We have shortened the lead time quite considerably, which is good news. We are operationally very efficient. Our business efficiency is also good news, but what is even better news is the result in the Q2, PLN 1.7 billion in EBITDA, PLN 1.1 billion on operating profit, and nearly PLN 800 million of net profit.

Speaker #1: In our case, few pieces of information was important about the back to school period. First of all, despite the high base last year, this year we are very happy with the back to school season.

Speaker #4: So we have those assets in Romania. We start improving our operations, shifting certain operations from Poland to Romania. First deliveries go to Constanța, so we are shortening the transportation route. It goes straight to Romania, to the newly opened DC, and the target markets are already getting the deliveries.

Speaker #1: It was very strong season. What we could see was that it was stronger online practically in all the brands online. And we also prepared a couple of numbers for you.

Speaker #1: It's worth mentioning here that it is a period analyzed since the 17th September, August is the time when parents and children start thinking about school.

Speaker #4: Lead times have also improved. We have shortened the lead time quite considerably, which is good news. We are operationally very efficient. Our business efficiency is also good news.

Speaker #1: Till the 6th of September is when the time when people still do back to school shopping. We divided the data into two groups. The first group is purchase in reserves and re-kids brand and since a brand.

Speaker #4: But what is even better news is the result in the second quarter: 1.7 billion in EBITDA, 1.1 billion in operating profit, and nearly 800 million in net profit.

Speaker #1: There you can see that in the omnichannel there was a 23% growth year over year in offline plus 19% and online as I mentioned as much as 30% growth year over year.

Speaker #4: From 40% to 50% of growth at any level. So, a very good quarter. Of course, what we were supported by was the macroeconomic situation, strong zloty, but these conditions were there, and we needed to know how to make use of them.

Marcin Bójko: From 40% to 50% of growth at any level, so a very good quarter. Of course, what we were supported by was macroeconomic situation, strong złoty. These conditions were there, but we needed to know how to make use of them. We know how to manage our prices and margins across all the brands. Therefore, we enjoy such great results that you can see. This is the fifth quarter in the row with an improvement of profitability. A bit more detail on how we made it happen, and we will start with sales. Traditionally, Q2, 18% of growth on revenues, nearly 19%, and the first brand, the stronger one, so the offline stores, and over 16% of increase in online sales, and particularly online sales following the hard Q1 marked by poor weather, the coldest April in history, just to remind you.

Speaker #1: The second group that we analyzed against the back to school period were the brands dedicated to teenagers. Crop and house and there we observed in omnichannel the growth was 20% year over year.

Speaker #4: We know how to manage our prices and margins across all the brands. Therefore, we enjoy such great results that we can both. This is the fifth quarter in a row with an improvement of profitability.

Speaker #4: A bit more detail on how we made it happen. And we will start with sales. Traditionally, in the second quarter, we had 18% growth on revenues, and nearly 19% in the first branch, the stronger one.

Speaker #1: In offline 18% year over year. And online 42%. Short notes to finish this off with. In Sinsay we noted in this period there was more interest in products in a higher price point level whereas in the crop and house brands we noticed that teenagers were more interested in product and viral products.

Speaker #4: So, the offline stores and over 16% increase in online sales, and particularly online sales following the hard first quarter marked by poor weather.

Speaker #4: The coldest April in history, just to remind you, rebounds very nicely from plus 1 in the first quarter to plus 16 in the second.

Marcin Bójko: We bounced very nicely from +1 in Q1 to +16 in Q2. That is a very sound level that we would like to stick to. Moving on. As for the regions, the online sales grew everywhere at a more or less similar good pace. In terms of offline stores, LFL, also from quarter to quarter, so compared to the first difficult quarter, rebounced and was positive everywhere. Just one remark here, Southern Europe also noticed improvement, but in Q1, that was -0.5. Now it is -4.5. We can see that this negative dynamics is the only one in the region, sustained. Romania keeps improving, but anyhow, what we are focusing on is to keep on operating and be the best in the hard market conditions. We are very active about our offer and about our logistics.

Speaker #4: That's a very sound level that we would like to stick to moving forward. As for the regions, online sales grew everywhere at a more or less similarly good pace. In terms of offline stores, LFL was also stable from quarter to quarter.

Speaker #1: This is a very brief overview of the back to school season. Thank you. This is what we observed in the last couple of weeks in the back to school period.

Speaker #4: So compared to the first difficult quarter rebounds and was positive everywhere. Just one remark here, southern Europe also noticed improvement, but in the first quarter that was minus point and a half.

Speaker #1: What happened over the last couple of weeks and months as Monika mentioned in June, we presented to you our initiatives focused on increasing the dynamics of sales in the Sinsay brand.

Speaker #4: Now it's minus four and a half. You can see that this dynamic, this negative dynamic, is the only one in the region sustained. Romania keeps improving, but anyhow, what we are focusing on is to keep operating and to be the best in the hard market conditions.

Speaker #1: We split it into five areas. Some of the things I already discussed. I will not go through all of them, but I would like to comment the areas that we have not touched upon yet.

Speaker #4: So we are very active about our offer. And regarding our logistics, certainly that will bring results. Now, looking at like-for-likes as such, another piece of good news following two quarters of negative LFL results.

Speaker #1: In terms of collection, we can see that our back to fashion and smart value approach works. At the beginning of the autumn. So our focus on the middle price points, but with a better fashion works, we see better likes and better sales parameters.

Marcin Bójko: Certainly, that will bring results. Now, looking at like-for-likes as such, another piece of good news following two quarters and negative LFL results, we have +1.8 at the group level, so a return to positive dynamics. In terms of brands, Sinsay, -1.2. I believe that it is for the first time that we say that -1.2 is not comparable with -1.67 because, well, we did face certain challenges concerning our offer, but now we started the sales earlier on, making space for the autumn offer, equipped with the knowledge that we are rich in now, knowing what August and September sales might look like, -1.2 fits into our expectations. As much as we worked in this quarter with the products, we know that it is important to keep the margin strong. Everything now is heading in the right direction following the sales period.

Speaker #4: We have plus 1.8 at the group level, so a return to positive dynamics. In terms of brands, Sinsay minus 1.2. I believe that it is for the first time that we can really say that the minus 1.2 is not comparable with minus 1.67, because concerning our offer—now we started the sales earlier on, making space for the autumn offer, equipped with the knowledge that we are rich in now, knowing what August and September sales might look like.

Speaker #1: So it was a move towards the right direction. And in terms of buyer experience, maybe these initiatives are not so media or PR focus.

Speaker #1: And they are not on the opening pages of the magazines, but it's PR work and it brings profit in shop sales strengthening the customer service works.

Speaker #1: But we are also replacing the furniture in the stores we are showing the collection, displaying furniture in a more better way. The initial results show that this works as well.

Speaker #4: Minus 1.2 fits into our expectations. As much as we worked in this quarter with the products, we know that it is important to keep the margin strong.

Speaker #4: So, everything now is heading in the right direction following the sales period. The remaining brands—five and four—and Reserved, our second biggest brand, have had eight quarters in a row with very good, positive like-for-like dynamics.

Speaker #1: We will be doing that constantly. And now modern 500 stores have self-service checkout on Monday. I didn't shopping in reserve myself here in Gdańsk.

Marcin Bójko: The remaining brands, Five and Four and Reserved, our second biggest brand, eight quarters in a row with very good positive like-for-like dynamics. What is also a source of our satisfaction is that our smaller brands, House and Cropp, for four quarters now have noted positive dynamics concerning like-for-likes, and Cropp in the last quarter has even reached really high single-digit or low double-digit results. So really nice. Another component that keeps shaping our result is gross margin. Gross profit margin, as I mentioned, 3.7 percentage point over the previous year, sustained trend from Q1. That was 4.5 percentage point and a strong złoty. You can see it in a common 3.6 versus 4 at this time of the year. But macro is not the entire result.

Speaker #1: And apart from me, four more customers use the self-service checkout and colleagues from our customer service team had a time to look to the sales part of the store.

Speaker #4: And what is also a source of our satisfaction is that our smaller brands, House and Cropp, for four quarters now, have noted positive dynamics concerning like-for-likes, and Cropp in the last quarter has even reached really high single-digit or low double-digit results.

Speaker #1: So it shows that the customer service can focus on better display of the collection. We discussed performance marketing already and home we continue working in expanding the brand.

Speaker #4: So, really nice. Another component that keeps shaping our result is gross margin. Gross profit margin, as I mentioned, increased by 3.7 percentage points over the previous year—a sustained trend from the first quarter.

Speaker #1: We eliminate the slowest rotating products with the lowest margin in shops. We do many remodeling. We reduce home area. We put different furniture there.

Speaker #4: That was four and a half points, and the strong zloty. We can see it in a comment—3.6 versus 4 at this time of the year—but macro is not the entire result, around half a point of this effect.

Speaker #1: We increasing the garment zone and after the mini remodeling the results of such stores versus the comparable group are very positive and home in terms of numbers.

Marcin Bójko: Around half a point of this effect, was something that resulted from our efficiency, our price management, particularly in the sales season. As far as macro is concerned, something that we cannot control, the entire market is doomed to rely on exchange rates. We do have a 100% influence on the effective management of SG&A costs. The work we carried out last year now gives results. We have lean bases, and we can again boast the drop of costs per square meter as well as, versus profit. Now in revenues, the greatest components is this logistical CapEx that I mentioned at the beginning. It performs really well in terms of OpEx. That means that we keep increasing our efficiency and quality of our operations. Those return periods really are now reduced to the window of a few months. We can see that reflected in OpEx.

Speaker #4: That was something that resulted from our efficiency and our price management, particularly in the sales season. As far as the macro environment is concerned, this is something we cannot control—the entire market is dependent on exchange rates.

Speaker #1: The positive information is that the only department is a Sinsay brand in every month of the SS 26 period. We saw positive likes. Maybe the base was not too demanding, but it is a good forecast for the future and we also move in the right direction here.

Speaker #4: We do have one hundred percent influence on the effective management of SG&A costs, so the work we carried out last year is now giving results.

Speaker #1: In terms of logistics, our optimization of the network and our assets in the optimum layout and adjusting operations and flow of the products to them.

Speaker #4: We have a lean basis, and we can again boast the drop of costs per square meter as well as versus profit. Now, regarding revenue, the greatest component is this logistical capex that I mentioned at the beginning.

Speaker #1: This is happening the closer we get to the end of the year, the optimum will we will be getting closer to the optimum. And with time, we have to make customers used to the fact that we have good location products or our logistics is improving and the customers will have to get reused to the fact that they will not have to wait for the product as long as they had to immediately after the fire in the late 2025.

Speaker #4: It performs really well in terms of OPEX. So that means that we keep increasing our efficiency and quality of our operations, and those return periods really are now reduced to the window of a few months.

Speaker #4: We can see that reflected in OPEX. And the other big leverage is the increasing share of the Sinsay brand. This concept grows quite naturally in terms of stores, and the costs of stores constitute the largest group in terms of our P&L.

Marcin Bójko: The other big leverage is the increasing share of the Sinsay brand. This concept, pretty naturally in terms of stores and the cost of stores, constitute the greatest group, in terms of our P&L is lower. The more Sinsay stores we have, the lower the costs per square meter are. Also it is worthwhile taking a look on something that Monika mentioned right at the beginning. We have a number of initiatives. We planned them in June. We will show you the status, but, looking at performance marketing, some buying advertisements online, that constitutes a high group of costs. With our good profits and the lean cost basis, we now see that the moment has come to spend a bit more on performance marketing. The July changes in the European Union concerning subsidies for Asian platforms, €3 per product line.

Speaker #1: In terms of numbers, last month, the first half, sorry, the entire August and the first half of September 20% increase in omnichannel in online similar.

Speaker #4: Is lower. So, the more Sinsay stores we have, the lower the costs per square meter are. Also, it is worthwhile taking a look at something that Monica mentioned right at the beginning.

Speaker #1: Dynamics and positive LFL of 4% and my note is that this trend is very positive and it is improving the first half of August.

Speaker #1: We saw less summer in our offering. We worked more on the margin. So the likes for likes were slightly below the numbers in the table.

Speaker #4: We have a number of initiatives; we planned them in June. We will show you the status, but looking at performance marketing and buying advertisements online—that constitutes a high group of costs.

Speaker #1: The second half of August and the first part was better in the first part of September was the strongest. We are happy about that, but in the window of a month and a half, it looks quite good.

Speaker #4: And with our good profits and the lean cost basis, we now see that the moment has come to spend a bit more on performance marketing.

Speaker #1: We also saw a good margin above the gross margin above last year and in terms of our opening plans for the second half. They remain unchanged.

Speaker #4: The July changes in the European Union concerning subsidies for Asian platforms through the Europe product line—at the beginning of July, we did not see the results, and this is what we expected.

Speaker #1: They stay within the goal that we planned in June. And the payment of the dividend is very comfortable situation. We share our profits with them.

Marcin Bójko: At the beginning of July, we did not see the results, and this is what we expected. In May last year when similar regulation was passed in the US, the full rotation also took a while. Starting from August, we have started noticing the changes in our e-com dynamics. That is the good moment to increase expenditure on performance marketing. So in Sinsay, a percentage points in OpEx versus revenue is greater, is around about a half of a percentage point, across the entire group. So we are investing from this base into the costs. In the coming period, certainly, we can see the positive results in traffic, customers traffic, sales, and this is something that will surely bring positive results in the coming quarters. When we put all these elements together, what we get is what you see. So very dynamic and strong growth in profit and profitability.

Speaker #4: In May last year, when similar regulation was passed in the US, the full rollout also took a while. Starting from August, we began noticing changes in our e-commerce dynamics.

Speaker #1: And by the end of October, we will pay the second tranche of 500 Polish Lotus pay shares if I remember correctly, the payout date is the 9th of October.

Speaker #1: So you still have time to buy shares which you we encourage you to do. Summing up the last six months, the last month and a half and our initiatives looking at the entire year, our guidance for this year remains mostly unchanged.

Speaker #4: That's a good moment to increase expenditure on performance marketing. So, in Sinsay, the percentage points in OPEX versus revenue is a greater percentage point across the entire group.

Speaker #1: The only change in close is the gross margin we can see after the results of the second quarter and what we observing now by mid-September enables us to increase gross margin estimation from 56% to 56.5 to 57%.

Speaker #4: So, we are investing from this base into the costs, but in the coming period, certainly we can see the positive results in traffic, customer traffic, sales, and this is something that will surely bring positive results in the coming quarters.

Speaker #4: When we put all these elements together, what we get is what you see. So very dynamic and strong growth in profit and profitability. After the first half year, over 3 billion EBITDA over 1.8 billion in EBIT and 1.2 in terms of net profit.

Speaker #1: And naturally, it cascades down the higher into higher a bit margin and net profit margin and the remaining positions remain largely unchanged. And the net debt and EBITDA we expect to improve slightly against the latest estimations.

Marcin Bójko: After the H1, over PLN 3 billion EBITDA, over PLN 1.8 billion in EBIT and PLN 1.2 billion in terms of net profit. So record levels, a huge increase in profitability, a really strong foundation built after the H1. So now pretty comfortably in terms of financial situation. We are entering the autumn and winter season, and we can focus on business initiatives and delivering good collections and continuous improvement of our efficiency. Out of the record profit, we finance investments in terms of CapEx, as the H1 is over PLN 1 billion and as mentioned, over a half of this billion is the stores over the first 6 months and over PLN 440 million is logistics.

Speaker #4: So, record levels, a huge increase in profitability, and a really strong foundation built after the first half of the year—so now, pretty comfortably in terms of our financial situation, we are entering the autumn and winter season, and we can focus on business initiatives and delivering good collections and the continuous improvement of our efficiency.

Speaker #1: And this is we would like to end with this positive note and now we move to Q&A. What are the total group likes for the first half of 2026?

Speaker #1: Let me open the data. Let me display the rights slide. The first half of 2026 minus zero point three. Next question. The impact of foreign exchange rates dollar versus dollar.

Speaker #4: Out of the record profit, we finance investments. In terms of capex, after the first half is over PLN 1 billion. And as mentioned, over half of this billion is for the stores over the first six months and over PLN 440 million is for logistics.

Speaker #1: Recently, we can see a reversing trend where the Polish Lot is losing against the dollar. How do you prepare yourself for the situation if the dollar costs circa four zlotys?

Speaker #4: Now, versus the entire year, the CAPEX spend on the stores will, of course, result from the number of openings, and in terms of logistics, a similar amount—maybe somewhat less—is going to be spent over the year.

Marcin Bójko: Now, versus the entire year, the CapEx spent on the stores will of course result from the number of openings and in terms of logistics, a similar amount, maybe somewhat less, is going to be spent over the year. So guidance for this year is PLN 2.5 billion CapEx for 2026. This is something that we stick to. As for the balance and the stock level and the balance, PLN 1,633 per square meter. We are entering now the autumn-winter season. We had to buy more products and, mid-September, we will have reached this level of stocks and starting from the end of September, October, this level will gradually return to the benchmark. But, PLN 1,500, PLN 1,600, that is the stock level per square meter that we would like to work with in the coming periods.

Speaker #1: Well, it's significantly affect the future margin of the company. Yes, this is a very good question. I think we saw it on the slide where the margin from 3% in the second quarter it was even shown in the commentary right now as a 26 is 360.

Speaker #4: So guidance for this year is two and a half billion capex for 2026. This is something that we stick to. As for the balance and the stock level and the balance, 100s, 1,633 slotty per square meter, we are entering now the autumn winter season.

Speaker #1: Last time the exchange rate was four zlotys. So from the 3.7 point that the stronger Polish Lotus with the same purchase prices is circa 3 percentage points.

Speaker #4: We had to buy more products, and by mid-September, we will have reached this level of stocks. Starting from the end of September and into October, this level will gradually return to the benchmark.

Speaker #1: So this is the impact. And what we see now is 3.71 to 3.75. So the impact if it materializes next year would be mid-year.

Speaker #4: But 1,500–1,600, that’s the stock level per square meter that we would like to work with in the coming periods. But of course, we also make sure that in the second quarter, we have an improvement.

Speaker #1: What is the exact cost of the share program on the first and second quarter where it is is it presented in the functional layout and what cost do you expect for the second half year of 2022 6 and for 2027 the costs are assumed as reserve mostly most of it is booked in July to the second quarter but the exact amounts I will not mention the exact amounts but the program is constructed in the same way in terms of indicators and KP bonus KPIs for our teams now the option is to replace those that into the share so in terms of cost or calculation or approach nothing has changed so still the most important are the business goals and there is a share program for the achievement of business goals so with these results of course these amounts are significant and positive but by the end of the end they motivate our employees to work hard and we share the success of LPP also with them.

Marcin Bójko: But of course, we also make sure that in Q2, we have an improvement, 157 days against 176 days last year. The situation in all the brands looks very comfortably in terms of this inventory turnover.

Speaker #4: 157 days, against 176 days last year. The situation in all the brands looks very comfortable in terms of this inventory turnover.

Speaker #2: Good profit and good inventory management are also leading to good financial and cash flow results. In terms of liquidity, there has been improvement year over year, with net debt a bit better and leverage on level one.

Magdalena Kopaczewska: Good profit and good inventory management are also good financial and cash flow results in terms of liquidity improvement year over year, net debt, EBITDA, net debt to EBITDA on leverage, on level 1. Improvement year over year as well. Very comfortable level and a graph that is not very pleasing looking at our results is the improving operational workflow. We spend a lot on CapEx, more than PLN 3 billion last year and PLN 2.5 billion this year. So this year we will finish the record period for the extensions of CapEx, the large investment program. We also pay dividend. We also are at the maximum level of the payment of dividend. We are also able to operate a very stable financial foundations. The cash flow is improving the closer we get to the end of the year.

Marcin Bójko: Good profit and good inventory management are also good financial and cash flow results in terms of liquidity improvement year over year, net debt, EBITDA, net debt to EBITDA on leverage, on level 1. Improvement year over year as well. Very comfortable level and a graph that is not very pleasing looking at our results is the improving operational workflow. We spend a lot on CapEx, more than PLN 3 billion last year and PLN 2.5 billion this year. So this year we will finish the record period for the extensions of CapEx, the large investment program. We also pay dividend. We also are at the maximum level of the payment of dividend. We are also able to operate a very stable financial foundations. The cash flow is improving the closer we get to the end of the year.

Speaker #2: Improvement year overall as well, very comfortable level and a graph that is not very pleasing looking at our results. Is the improving operational workflow.

Speaker #2: We spend a lot on capex—more than $3 billion last year and $10.5 billion this year. So this year, we will finish the record period for the sums of capex, the large investment program.

Speaker #2: We also pay dividends. We are also at the maximum level of dividend payment. We are able to operate on a very stable financial foundation.

Speaker #1: Next question is about insurance or damages how much damages did you actually receive in the second quarter and in the first half year what amount is still to be recovered and what additional operational costs of the fire still charge the second quarter what you expect them to expire entirely what is the value of the receivable receivables by the end of July in trade receivables this is very specific question we have recovered more than 250 million.

Speaker #2: The cash flow is improving. The closer we get to the end of the year, and in 2027, we expect permanent increase of cash and we will know we will be comfortable with financing the cash six months through good results, comfortable situation in terms of cash flow and working capital and very good liquidity situation that is improving as well.

Marcin Bójko: And in 2027, we expect permanent increase of cash and we will be comfortable with financing the cash 6 months. Good results, comfortable situation in terms of cash flow and working capital, and very good liquidity situation that is improving as well. That was about the last 6 months, but we are also in the middle of Q3, so we will also, as always, look at what we see in the data. At the beginning of the autumn/winter is Back to School season, and I will ask Magda to discuss the details of that specific period in our case. Few pieces of information that was important about the Back to School period. First of all, despite the high base last year, this year, we are very happy with the Back to School season. It was very strong season.

Speaker #1: Polish Lotus from insurance damages as the additional cost for the second quarter they are minimum as I mentioned we are close to the optimum network and the second quarter it's for maximum 5 million Lotus but for now it's it has expired by now.

Speaker #2: That was about the last six months, but we are also in the middle of the third quarter, so we will also, as always, look at what we see in the data at the beginning of the autumn/winter, which is back-to-school season. I will ask Magda to discuss the details of that specific period in our case.

Speaker #1: In PNL and profit and loss we have about not below 350 million posted to the PA account. So the liquidation process is ongoing. Now we have recovered more than 250 million.

Speaker #2: A few pieces of information—most importantly about the back-to-school period. First of all, despite the high base last year, we are very happy with the back-to-school season this year.

Speaker #2: It was a very strong season. What we could see was that it was stronger online, practically across all the brands online. And we also prepared a couple of numbers for you.

Speaker #1: We are still talking to the consortium and to the insurer. So once we close this case we will let you know. Can you tell us a little bit more about the four percent like of the group since August for the brand broken down in the brands?

Magdalena Kopaczewska: What we could see was that it was stronger online, practically in all the brands online. And we also prepared a couple of numbers for you. It is worth mentioning here that it is a period analyzed since 17 September. August is the time when parents and children start thinking about school, till 6 September is the time when people still do Back to School shopping. We divided the data into 2 groups. The first group is purchase in Reserved and Reserved Kids brand and Sinsay brand. There you can see that in the omnichannel, there was a 23% growth year over year. In offline, +19%, and online, as I mentioned, as much as 30% growth year over year. The second group that we analyzed against the Back to School period were the brands dedicated to teenagers, Cropp and House.

Marcin Bójko: What we could see was that it was stronger online, practically in all the brands online. And we also prepared a couple of numbers for you. It is worth mentioning here that it is a period analyzed since 17 September. August is the time when parents and children start thinking about school, till 6 September is the time when people still do Back to School shopping. We divided the data into 2 groups. The first group is purchase in Reserved and Reserved Kids brand and Sinsay brand. There you can see that in the omnichannel, there was a 23% growth year over year. In offline, +19%, and online, as I mentioned, as much as 30% growth year over year. The second group that we analyzed against the Back to School period were the brands dedicated to teenagers, Cropp and House.

Speaker #2: It's worth mentioning here that the period analyzed is since September 17th. August is the time when parents and children start thinking about school.

Speaker #1: Have you confirmed. Return to the positive dynamics? Yes. With every every two weeks it was improving. Mid October. August it was still negative. The second half of August it was 0.5 and in the first half of September it is strong one digit number positive.

Speaker #2: Until the 6th of September is the time when people still do back-to-school shopping. We divided the data into two groups. The first group is purchases in Reserved and Re-Kids brands and since a brand.

Speaker #1: And we are happy that the relation of the dynamics of since to reserves is very close in this period. So we are happy about that because in previous quarters the gaps was higher but right now the dynamic is close to the level as we are in the middle of the quarter the beginning of autumn but the result is very promising.

Speaker #2: There you can see that in the omnichannel, there was a 23% growth year over year in offline, plus 19%, and online, as I mentioned, as much as 30% growth year over year.

Speaker #2: The second group that we analyzed against the back to school period were the brands dedicated to teenagers crop and house and there we observed in omnichannel the growth was 20% year over year in offline 18% year over year and online 42%.

Speaker #1: Question concerns gross profit margin. Gross profit margin was 57.7 in the second quarter and in the third quarter it is still higher versus last year.

Magdalena Kopaczewska: And there we observed in omnichannel, the growth was 20% year-over-year. In offline, 18% year-over-year, and online, 42%. Short notes to finish this off with. In Sinsay, we noted in this period, there was more interest in products in a higher price point level, whereas in the Cropp and House brands, we noticed that teenagers were more interested in viral products. This is a very brief overview of the back to school season. Thank you. This is what we observed in the last couple of weeks in the back to school period. What happened over the last couple of weeks and months, as Monika mentioned, in June, we presented to you our initiatives focused on increasing the dynamics of sales in the Sinsay brand. We split it into five areas.

Marcin Bójko: And there we observed in omnichannel, the growth was 20% year-over-year. In offline, 18% year-over-year, and online, 42%. Short notes to finish this off with. In Sinsay, we noted in this period, there was more interest in products in a higher price point level, whereas in the Cropp and House brands, we noticed that teenagers were more interested in viral products. This is a very brief overview of the back to school season. Thank you. This is what we observed in the last couple of weeks in the back to school period. What happened over the last couple of weeks and months, as Monika mentioned, in June, we presented to you our initiatives focused on increasing the dynamics of sales in the Sinsay brand. We split it into five areas.

Speaker #1: Can you tell us how much of this improvement results from FX? Sourcing and freight and how much from better management of sales bargains and prices?

Speaker #1: How come it dropped to 50 6 that you envisage for 2027? Good question. I guess more from the perspective of 2027 indeed. When discussing the results I focus on 2026 but I'm happy that this question was starting from the beginning.

Speaker #2: To finish this off, in a sense, we noted that in this period there was more interest in products at a higher price point, whereas in the CROPP and HOUSE brands, we noticed that teenagers were more interested in products than in viral products.

Speaker #1: The first part of the question as mentioned out of 3.7 percentage point of improvement year on year half a percentage point is our efficiency and around 0.2 is the remaining impact including logistics.

Speaker #2: This is a very brief overview of the back-to-school season. Thank you. This is what we observed in the last couple of weeks during the back-to-school period.

Speaker #1: The rest is stronger zloty with similar sourcing costs. How do we perceive it? So you can see that macro is certainly helpful here in the second half of the current year.

Speaker #2: What happened over the last couple of weeks and months—as Monica mentioned—in June, we presented to you our initiatives focused on increasing the dynamics of sales in the Sinsay brand.

Speaker #1: As we already seen September the margin is over that from the last year that shows our efficiency particularly in smaller brands like reserved but also in since the effects impact is actually balancing now last year we bought collection for 3.7 and now we've reached a similar level so we can see that things are leveling out here.

Speaker #2: We split it into five areas. Some of the things I already discussed, so I will not go through all of them, but I would like to comment on the areas that we have not touched upon yet in terms of collection.

Magdalena Kopaczewska: Some of the things I already discussed, I will not go through all of them, but I would like to comment the areas that we have not touched upon yet. In terms of collection, we can see that our Back to Fashion and Smart Value approach works at the beginning of the autumn. So our focus on the middle price points, but with a better fashion works. We see better likes and better sales parameters. So it was a move towards the right direction. In terms of buyer experience, maybe these initiatives are not so media or PR-focused, and they are not on the opening pages of the magazines, but it's PR work, and it brings profit in shops. So strengthening the customer service works, but we are also replacing the furniture in the stores. We are showing the collections, displaying furniture in a better way.

Marcin Bójko: Some of the things I already discussed, I will not go through all of them, but I would like to comment the areas that we have not touched upon yet. In terms of collection, we can see that our Back to Fashion and Smart Value approach works at the beginning of the autumn. So our focus on the middle price points, but with a better fashion works. We see better likes and better sales parameters. So it was a move towards the right direction. In terms of buyer experience, maybe these initiatives are not so media or PR-focused, and they are not on the opening pages of the magazines, but it's PR work, and it brings profit in shops. So strengthening the customer service works, but we are also replacing the furniture in the stores. We are showing the collections, displaying furniture in a better way.

Speaker #2: We can see that our back to fashion and smart value approach works at the beginning of the autumn. So our focus on the middle price points, but with a better fashion works, we see better likes and better sales parameters.

Speaker #1: The second part of the question 2027 quite naturally I believe that was the second question in the Q&A session in our plans we envisage that weekending of zloty as we observe in the market.

Speaker #1: So say one and a half percentage point this is the impact of the weaker zloty. Another percentage point two and a half percentage points is higher purchase prices what happens in the oil market I guess is closely observed by everybody quite a leap in spring then release now return to over 100 dollars per barrel.

Speaker #2: So it was a move in the right direction, and in terms of buyer experience, maybe these initiatives are not so media- or PR-focused and they are not on the opening pages of the magazines, but it's PR work and it brings profit in shops.

Speaker #1: So that translates onto the purchasing pressure on the part of Asian suppliers polyester is quite a significant share. We have quite a share of this material in our production which of course also translates onto this pressure.

Speaker #2: So, strengthening customer service works, but we are also replacing the furniture in the stores where we are showing the collections, displaying furniture in a better way.

Speaker #1: So we model that in our margin as well but we are going to compensate for that in increasing prices in. CMH premium brands and partly with our efficiency.

Magdalena Kopaczewska: The initial results show that this works as well. We will be doing that constantly. Now more than 500 stores have self-service checkouts. On Monday, I did the shopping in Reserved myself here in Gdańsk. Apart from me, four more customers used the self-service checkouts and a colleague from our customer service team had the time to look to the sales part of the store. So it shows that the customer service can focus on better display of the collection. We discussed performance marketing already. In Home, we continue working in expanding the brand. We eliminate the slowest rotating products with the lowest margin in shops. We do mini remodeling. We reduce home area. We put different furniture there. We are increasing the garment zone. After the mini remodeling, the results of such stores versus the comparable group are very positive.

Marcin Bójko: The initial results show that this works as well. We will be doing that constantly. Now more than 500 stores have self-service checkouts. On Monday, I did the shopping in Reserved myself here in Gdańsk. Apart from me, four more customers used the self-service checkouts and a colleague from our customer service team had the time to look to the sales part of the store. So it shows that the customer service can focus on better display of the collection. We discussed performance marketing already. In Home, we continue working in expanding the brand. We eliminate the slowest rotating products with the lowest margin in shops. We do mini remodeling. We reduce home area. We put different furniture there. We are increasing the garment zone. After the mini remodeling, the results of such stores versus the comparable group are very positive.

Speaker #2: The initial results show that this works as well. We will be doing that constantly. And now, more than 500 stores have self-service checkouts as of Monday.

Speaker #1: When we look at 2025 or 26 the web periods particularly the first half of this year when this collection of since as reflected by likes actually likes behind the market.

Speaker #2: I didn't shop in Reserved myself here in Gdańsk. And apart from me, four more customers used the self-service checkouts, and a colleague from our customer service team had time to look at the sales part of the store.

Speaker #1: So we had to work with a lower margin so when we add up our efficiency that is the where the results for the coming year comes.

Speaker #2: So, it shows that customer service can focus on better display of the collection. We discussed performance marketing already, and hope we continue working on expanding the brand.

Speaker #1: Well it looks was against 2026 but when you actually go back to 2025 or 23 then this level in the long run we consider to be repeat repeatable repetitive.

Speaker #2: We eliminate the slowest-rotating products with the lowest margin in shops. We do many remodelings. We reduce home area. We put different furniture there.

Speaker #1: So plus and we find it comfortable. The current situation in the Red Sea may it potentially impact the timeliness of the deliveries. What percentage of products go via the Red Sea and what percentage goes around Africa.

Speaker #1: Prior to the conference with our logistics team we verified the status. We cannot see any delays so that's the good news. And even after all they havoc and the outbreak of war in Iran we never had any issues with delivering on time.

Magdalena Kopaczewska: In Home, in terms of numbers, the positive information is that the only department is the Sinsay brand. In every month of the SS26 period, we saw positive likes. Maybe the base was not too demanding, but this is a good forecast for the future. We also move in the right direction here in terms of logistics, our optimization of the network, and our assets in the optimum layout and adjusting operations and flow of the products to them. This is happening the closer we get to the end of the year. We will be getting closer to the optimum.

Marcin Bójko: In Home, in terms of numbers, the positive information is that the only department is the Sinsay brand. In every month of the SS26 period, we saw positive likes. Maybe the base was not too demanding, but this is a good forecast for the future. We also move in the right direction here in terms of logistics, our optimization of the network, and our assets in the optimum layout and adjusting operations and flow of the products to them. This is happening the closer we get to the end of the year. We will be getting closer to the optimum.

Speaker #1: We learned it of the first crisis. The sea. So we are planning everything well in advance. So lead times are really good. And as part of the world as the return to the Suez Canal goes most of our ship owners actually go around Africa.

Speaker #1: If not all of them there are single voices that claim that they would wish to return to Suez that would of course reduce the the time needed to cover the distance but this is just the first voices the ship owners keep exploring that potential and I guess mid November we are going to sit and discuss the freight rates for next year.

Magdalena Kopaczewska: With time, we have to make customers used to the fact that our logistics is improving, and the customers will have to get reused to the fact that they will not have to wait for the product as long as they had to immediately after the fire in late 2025. In terms of numbers, the entire August and the first H1 of September, 20% increase in omnichannel. In online, similar dynamics and positive LFL of 4%. My note is that this trend is very positive, and it is improving the first H1 of August. We saw less summer in our offering. We work more on the margin, so the like for likes were slightly below the numbers in the table. The second H1 of August and the first part of September was the strongest. We are happy about that.

Marcin Bójko: With time, we have to make customers used to the fact that our logistics is improving, and the customers will have to get reused to the fact that they will not have to wait for the product as long as they had to immediately after the fire in late 2025. In terms of numbers, the entire August and the first H1 of September, 20% increase in omnichannel. In online, similar dynamics and positive LFL of 4%. My note is that this trend is very positive, and it is improving the first H1 of August. We saw less summer in our offering. We work more on the margin, so the like for likes were slightly below the numbers in the table. The second H1 of August and the first part of September was the strongest. We are happy about that.

Speaker #1: Everything will become clear. Then the media talk about the shortages of gas in Bangladesh in India. The shortages do impact operations of factories. Can that impact our production?

Speaker #1: We do not have such information reaching us as of now. We have now the orders for the first half of the next year we've placed the orders there is no wiring information.

Speaker #1: The only thing well is awaiting the decisions on the higher prices that we actually did take into account in our guidance for next year.

Speaker #1: The question concerns likes of since can you give us the specificity as per country concerning since like likes yes give you the precise data in a moment.

Magdalena Kopaczewska: But in the window of a month and a half, it looks quite good. We also saw a good margin, the gross margin above last year. In terms of our opening plans for the H2, they remain unchanged. They stay within the goal that we planned in June. The payment of the dividend is very comfortable situation. We share our profits with them, and by the end of October, we will pay the second tranche of 500 PLN per share. If I remember correctly, the payout date is 9 October. So you still have time to buy shares, which we encourage you to do. Summing up the last month and a half, and our initiatives looking at the entire year, our guidance for this year remains mostly unchanged. The only change in close is the gross margin.

Marcin Bójko: But in the window of a month and a half, it looks quite good. We also saw a good margin, the gross margin above last year. In terms of our opening plans for the H2, they remain unchanged. They stay within the goal that we planned in June. The payment of the dividend is very comfortable situation. We share our profits with them, and by the end of October, we will pay the second tranche of 500 PLN per share. If I remember correctly, the payout date is 9 October. So you still have time to buy shares, which we encourage you to do. Summing up the last month and a half, and our initiatives looking at the entire year, our guidance for this year remains mostly unchanged. The only change in close is the gross margin.

Speaker #1: As for the entire SS 26 season apologies that was the group level. So at the level of since minus 3.8 the first half 8 the first half of 2026 and actually all the regions were underwater the only positive exception was Europe.

Speaker #1: This was Eastern Europe Kazakhstan Ukraine so after the weaker. Previous year we saw them rebouncing this year. Southern Europe with Romania that constitutes the greatest share there the like was below the average minus 3.8.

Speaker #1: The other part of the question is whether the negative like in since results from the growing competition collection or any other factors and what does the situation look like in terms for since like in the third quarter.

Magdalena Kopaczewska: We can see after the results of Q2 and what we are observing now by mid-September enables us to increase gross margin estimation from 56% to 56.5% to 57%. Naturally, it cascades down into higher EBITDA margin and net profit margin, and the remaining positions remain largely unchanged. The net debt and EBITDA, we expect to improve slightly against the latest estimations, and we would like to end with this positive note. Now we move to Q&As. What are the total group likes for the H1 of 2026? Let me open the data. Let me display the right slide. The H1 of 2026, -0.3. Next question, the impact of foreign exchange rate, dollar versus dollar. Recently, we can see a reversing trend where the Polish złoty is losing against the dollar. How do you prepare yourself for this situation?

Marcin Bójko: We can see after the results of Q2 and what we are observing now by mid-September enables us to increase gross margin estimation from 56% to 56.5% to 57%. Naturally, it cascades down into higher EBITDA margin and net profit margin, and the remaining positions remain largely unchanged. The net debt and EBITDA, we expect to improve slightly against the latest estimations, and we would like to end with this positive note. Now we move to Q&As.

Speaker #1: As for the reasons I guess there are multiple factors. We tried to address them in our initiatives. That we outlined to you and the status of which we reported to you earlier today.

Speaker #1: The collection somewhat we've had some other price points and expectations from the customers maybe performance we are operating in the omnichannel this is the source of our strength so maybe you should focus on profitability more than on consumer traffic.

Speaker #1: These are communicating vessels. So this is something that again worked to our favor. These are well there are many factors here. The weather well we keep developing in a very fast pace.

Monika Wszeborowska: What are the total group likes for the H1 of 2026?

Speaker #1: So there is this natural level of cannibalization setting in that would account for up to 2 percentage points. This is something again that reduces our likes likes so you can talk of a number of components here.

Marcin Bójko: Let me open the data. Let me display the right slide. The H1 of 2026, -0.3.

Monika Wszeborowska: Next question, the impact of foreign exchange rate, dollar versus dollar. Recently, we can see a reversing trend where the Polish złoty is losing against the dollar. How do you prepare yourself for this situation? If the dollar costs circa 4 złoty, will it significantly affect the future margin of the company?

Speaker #1: But anyhow our initiatives do work by the end of the year. The logistics will keep on heating up. We'll keep on optimizing our order placing process display of collections in the stores and our work on the home collection.

Speaker #1: In the third quarter after the month and a half so half of the quarter we can see that the like is behaving well. It is above the the average level expected in August.

Magdalena Kopaczewska: If the dollar costs circa 4 złoty, will it significantly affect the future margin of the company? Yes, this is a very good question. I think we saw it on the slide with the margin from 3.7% in Q2. It was even shown in the commentary. Right now, SS26 is 360. Last time, the exchange rate was 4 złoty still from the 3.7 point, the stronger Polish złoty with the same purchase prices is circa 3 percentage points. So this is the impact. What we see now is 3.71 to 3.75. So the impact, if it materializes next year, would be mid-year. What is the exact cost of the share program on Q1 and Q2? Is it presented in the functional layout? What cost do you expect for the H2 2026 and for 2027?

Marcin Bójko: Yes, this is a very good question. I think we saw it on the slide with the margin from 3.7% in Q2. It was even shown in the commentary. Right now, SS26 is 360. Last time, the exchange rate was 4 złoty still from the 3.7 point, the stronger Polish złoty with the same purchase prices is circa 3 percentage points. So this is the impact. What we see now is 3.71 to 3.75. So the impact, if it materializes next year, would be mid-year.

Speaker #1: We worked more with the margin. We had more of autumn than summer. So the first half of August was lost. So ever since the likes have really grown high.

Speaker #1: I wouldn't like to give you a very precise level because still we have the other half of Q3 ahead. But as I said in September we are reaching those high single digit levels.

Speaker #1: There are even days where the like is at the level of 10 or 12 percent. Another question concerns competition. Does the company regard it as a competition and is it is the off price concept of any threat.

Monika Wszeborowska: What is the exact cost of the share program on Q1 and Q2? Is it presented in the functional layout? What cost do you expect for the H2 2026 and for 2027?

Speaker #1: To the group. We perceive it as a natural segment a pretty different segment. Something that was mentioned right at the beginning when the entire board talked to you in Warsaw.

Magdalena Kopaczewska: The costs are assumed as Reserved mostly. Most of it is booked in July to Q2, but I will not mention the exact amounts. The program is constructed in the same way in terms of indicators and bonus KPIs for our teams. The option is to replace that into the share. In terms of cost or calculation or approach, nothing has changed. Still the most important are the business goals. There is a share program for the achievement of business goals. With these results, of course, these amounts are significant and positive, but by the end of the end, they motivate our employees to work hard, and we share the success of LPP also with them. Next question is about insurance or damages. How much damages did you actually receive in Q2 and in H1?

Marcin Bójko: The costs are assumed as Reserved mostly. Most of it is booked in July to Q2, but I will not mention the exact amounts. The program is constructed in the same way in terms of indicators and bonus KPIs for our teams. The option is to replace that into the share. In terms of cost or calculation or approach, nothing has changed. Still the most important are the business goals. There is a share program for the achievement of business goals. With these results, of course, these amounts are significant and positive, but by the end of the end, they motivate our employees to work hard, and we share the success of LPP also with them.

Speaker #1: This market is a different segment. I believe there is a place for them to grow and for us to grow. Including since they are the brands of ours like reserve reserved health has been showing it for a year that you can actually grow very fast and for two quarters also crop has been showing that you can actually produce very good dynamics following our model.

Speaker #1: You've increased guidance for 2026 but the time you will cap the one you had for 27 is this conservative approach. Related to the period being distant and to there being a lot of uncertainty or simply you've exhausted the certain improvements.

But the program is constructed in the same way, in terms of indicators and KP bonus caps for our teams. Now, the option is to replace those with shares. So, in terms of cost, calculation, or approach, nothing has changed. Still, the most important thing is the business goals and...

Uh, there is a share program for the achievement of business goals. So, with these results, of course, these amounts—

Speaker #1: Well of course there is a lot of efficiency that is why in our guidance in this part we do wish to leave certain space in order to stay on the safe side.

are significant and positive, but by the end of the year they motivate our employees to work hard.

Monika Wszeborowska: Next question is about insurance or damages. How much damages did you actually receive in Q2 and in H1? What amount is still to be recovered, and what additional operational costs of the fire still charged Q2? Would you expect them to expire entirely? What is the value of the receivables by the end of July in trade receivables?

Speaker #1: But as mentioned this macro effect that particularly still in the third quarter is is observable as persisting. That's the main reason for the guidance to be increased.

Magdalena Kopaczewska: What amount is still to be recovered, and what additional operational costs of the fire still charged Q2? Would you expect them to expire entirely? What is the value of the receivables by the end of July in trade receivables? This is a very specific question. We have recovered more than 250 million PLN from insurance damages. As the additional cost for Q2, they are minimum. As I mentioned, we are close to the optimum network, and Q2, it is for maximum 5 million PLN. For now, it has expired by now. In P&L, profit and loss, we have below 350 million posted to the Payment on Account, so the liquidation process is ongoing. We have recovered more than 250 million. We are still talking to the consortium and to the insurer, so once we close this case, we will let you know.

And we share the success of LPP also with them. Next question is about insurance or damages. How much in damages did you actually receive in the second quarter and in the first half of the year? What amount is still to be recovered and what additional operational costs?

Speaker #1: We have a higher macro earlier on. We thought about 55 56 at the third macro level. Now it increased but taking the entire macro away and giving given our efficiency we still reach the same level.

Speaker #1: So we'll keep emphasizing that in the long run 55 56 percent is the safe and repetitive result and this is something that well as this year has proven is a very good year that we know how to use in terms of profit margin.

Of the fire still charged in the second quarter, when do you expect them to expire entirely? What is the value of the receivables? Uh, by the end of July, in trade receivables?

Marcin Bójko: This is a very specific question. We have recovered more than 250 million PLN from insurance damages. As the additional cost for Q2, they are minimum. As I mentioned, we are close to the optimum network, and Q2, it is for maximum 5 million PLN. For now, it has expired by now. In P&L, profit and loss, we have below 350 million posted to the Payment on Account, so the liquidation process is ongoing. We have recovered more than 250 million. We are still talking to the consortium and to the insurer, so once we close this case, we will let you know.

uh,

This is a very specific question. We have recovered more than 250 million post-Lotus from insurance damages.

Speaker #1: In the long run what is our main goal behind our initiatives is to grow from sales offer repeated positive LFLs at a more balanced margin.

Speaker #1: How about the demand in Ukraine in the Baltic States and the question is whether in Romania you can see lower level of competition. Is the demand in Romania stabilizing.

As for the additional cost for the second quarter, they are minimal, as I mentioned, with close to the optimum network, and the second quarter is for a maximum of 5 million zlotys. But for now, it has expired. In P&L, in profit and loss, we have about—not below—350 million.

Speaker #1: It is stabilizing starting from the last part of the question the retail consumption there is still much different from the historical data but further focus says that the closer to the end of the year or half of the next year we are to expect a rebound.

Magdalena Kopaczewska: Can you tell us a little bit more about the 4% like of the group since August for the brand broken down into brands? Have you confirmed to return to the positive dynamics? Yes. With every 2 weeks, it was improving. Mid-August, it was still negative. The second half of August, it was 0.5, and in the first half of September, it is strong one-digit number positive. We are happy that the relation of the dynamics of Sinsay to Reserved is very close in this period. We are happy about that, because in previous quarters, the gaps was higher, but right now the dynamic is close to the level. We are in the middle of the quarter, the beginning of autumn, but the result is very promising.

Monika Wszeborowska: Can you tell us a little bit more about the 4% like of the group since August for the brand broken down into brands? Have you confirmed to return to the positive dynamics?

Speaker #1: So we hope that the likes will follow. This is what would historically happen. The market is equally challenging to everybody. We simply need to be the best.

Marcin Bójko: Yes. With every 2 weeks, it was improving. Mid-August, it was still negative. The second half of August, it was 0.5, and in the first half of September, it is strong one-digit number positive. We are happy that the relation of the dynamics of Sinsay to Reserved is very close in this period. We are happy about that, because in previous quarters, the gaps was higher, but right now the dynamic is close to the level. We are in the middle of the quarter, the beginning of autumn, but the result is very promising.

Speaker #1: Amidst everybody else in these conditions and this is what we now trying to deliver. As for the other countries with a such actually very good questions when you when you look at the sensei brand I'm looking at likes the Baltics and the Eastern Europe be the second quarter on now.

Talking to the Consortium and to the insurer. So, once we close this case, we will let you know. Can you tell us a little bit more about the 4%, like, of the group, uh, since oh, August, uh, for the brand broken down into brands? Have you confirmed to return to the positive Dynamics? Yes, with every, every 2 weeks it was improving needs octo August. It was still negative the second half of August. It was 0.5 and in the first

half of September, it is

Speaker #1: These are the markets with very strong likes. It's a very good level. So well Ukraine it is the second biggest market now a capital group following a very good year 2024.

Strong one-digit number, positive, and we are happy that the relation of the dynamics of, uh, since to reserve is very...

Closed in this period. So we are happy about that because in previous quarters the gap was higher, but right now the dynamic...

Speaker #1: It was nicely stabilized and we know that it was around one and a half percentage point that was taken away by Ukraine in the entire sensei brand.

It is close to the level as we are in the middle of the quarter, at the beginning of autumn, but the result is very promising.

Marcin Bójko: The question concerns gross profit margin. Gross profit margin was 57.7% in Q2, and in Q3, it is still higher versus last year. Can you tell us how much of this improvement results from FX sourcing and freight, and how much from better management of sales bargains and prices? How come it dropped to 56% that you envisage for 2027?

Monika Wszeborowska: The question concerns gross profit margin. Gross profit margin was 57.7% in Q2, and in Q3, it is still higher versus last year. Can you tell us how much of this improvement results from FX sourcing and freight, and how much from better management of sales bargains and prices? How come it dropped to 56% that you envisage for 2027?

Speaker #1: Now there is a reversal of the situation. There is that certain standardization in terms of numbers. So the likes are on average a single digit strong kind of likes.

Speaker #1: Performance marketing related question. Has the cost of performance marketing changed when the tariffs were introduced and the pressure from Chinese players has decreased. Cost wise per click there is a slight positive effect.

The question concerns gross profit margin. Gross profit margin was 57.7% in the second quarter and in the third quarter, so it is still higher versus last year. Can you tell us how much of this improvement results from FX, sourcing, and freight, and how much from better management of sales?

Bargains and prices.

Magdalena Kopaczewska: A good question. I guess more from the perspective of 2027. Indeed, when discussing the results, I focus on 2026, but I am happy that this question was asked. Starting from the beginning, the first part of the question, as mentioned, out of 3.7 percentage point of improvement year-on-year, half a percentage point is our efficiency, and around 0.2 is the remaining impact, including logistics. The rest is stronger złoty with similar sourcing costs. How do we perceive it? You can see that macro is certainly helpful here in the H2 of the current year. As we already seen, September, the margin is over that from last year. That shows our efficiency, particularly in smaller brands like Reserved, but also in Sinsay. The FX impact is actually balancing now.

How come it dropped to 506 this year in the village for 2027?

Speaker #1: But I guess the entire market is benefiting from it because we can see as mentioned that the regulations have been enforced since July and we see that since as reflected in browsers we of course looked at the entire market but we saw that since a has been doing pretty well and the cost of performance can be accelerated.

A good question. I guess more from the perspective of 2027,

Indeed.

When discussing the results, I have focused on 2026, but I'm happy that this question was added.

Speaker #1: We can increase expenditure which we treat as investing into winning a new customer keeping our customer with us. We know that any customer you attract of course has their expiry so to speak.

Starting from the beginning, the first part of the question, as mentioned: out of 3.7 percentage points, the point of improvement here, year on year, is half a percentage point—this is our efficiency in the round. Point two is the remaining impact, including logistics. The rest is strong as last year, with similar sourcing costs.

Speaker #1: But it is an investment for let's say three years to come so we are focusing now to improve the conversion. The question about turnover what is a difference in the turnover products across reserved and sensei these turnovers are pretty similar.

Magdalena Kopaczewska: Last year, we bought collection for 3.7, and now we have reached a similar level, so we can see that things are leveling out here. The second part of the question, 2027, quite naturally, I believe that was the second question in the Q&A session. In our plans, we envisage the weakening of złoty as we observe in the market. So, say, 1.5 percentage point, this is the impact of the weaker złoty. Another percentage point, 2.5 percentage points is higher purchase prices. What happens in the oil market, I guess, is closely observed by everybody. Quite a leap in spring than at least now returned to over $100 per barrel. That translates into the purchasing pressure on the part of Asian suppliers. Polyester is quite a significant share.

Speaker #1: In sensei owing to the volume and lower price point it is well two weeks faster I'd say. And the question concerns the category of home.

Speaker #1: We already mentioned the home category but with question is what categories in general in the home collection. Are the strongest and which are the weakest and what are the sales of the home collection at the moment.

How do we perceive it? So you can see that micro is, certainly helpful here in the second half of the current year, as we already seen September, the margin is uh, over that from the last year. That shows our efficiency particularly in smaller Brands like it reserved. But also in since say uh, the FX impact is actually balancing. Now, last year we bought collection, um, for 3.7, uh, and now we've reached a similar level, so we can see the things are leveling out here. The second part of the question 2027, quit naturally. I believe that was the second question in the Q&A session in our plans, we envisioned the weakening of slotty as we observe in the market. So say

1.5 percentage points—that is the impact.

Of the weakest Lottie.

Speaker #1: The home collection is the only was the only department in sensei that in every month of the first quarter of this year noted positive likes likes I don't want to tell you which product groups are the best or the worst and on which we focus because this is some kind of market information I think that the information that I share with you is that we focus on optimizing the extension of the brand.

Another percentage point—two and a half percentage points—is higher purchase prices.

What happens in the oil Market? I guess is closely observed by everybody quite a leap in Spring then released now return to over 100 per barrel. So that translates into the purchasing pressure on the part of Asian suppliers polyester.

Magdalena Kopaczewska: We have quite a share of this material in our production, which of course also translates into this pressure. So we model that in our margin as well, but we are going to compensate for that in increasing prices in LC MH premium brands and partly with our efficiency. When we look at 2025 or 2026, there were periods, particularly the H1 of this year when this collection of Sinsay, as reflected by likes, actually lagged behind the market, so we had to work with a lower margin. So when we add up our efficiency, that is where the result for the coming year comes. Well, it looks worse against 2026, but when you actually go back to 2025, 2024, or 2023, then this level in the long run, we consider to be repeatable, repetitive, so 2+, and we find it comfortable.

Speaker #1: We reduce the extension of the brand and we increase the depth of the brand so we will increase the choice in the best products.

Speaker #1: When can we expect the first results of the taste brand that you recently launched will there be any data in the report for the third quarter.

It's quite a significant share. We have a quiet issue with this material in our production, which, of course, also translates into this pressure. So we model that in our margin as well, but we are going to compensate for that.

Speaker #1: We are thinking how to report that but the scale even according to reporting requirements is still negligible in the GMP scale. It's just hundreds thousands of Polish lotus in the months scale rather than millions of billions billions.

In increasing prices in Lgma premium brands, and partly with our efficiency, when we look at 2025 or 2026.

Speaker #1: It is a very early stage. We focus on quality growth. We want to select categories wisely so that they fall into since they already offers we can see that it already works quite a many customers get to us through marketplace even they do not buy anything at marketplace but quite a large percentage buys things from since they so we can see the synergy movement as one of our marketplace assumption is already working but the scale is still limited.

There were periods, particularly in the first half of this year, when this collection of Senses, as reflected by likes, actually lagged behind the market. So we had to work with a lower margin. When we add up our efficiency, that is where the results for the coming year come from.

Marcin Bójko: The current situation in the Red Sea may potentially impact the timeliness of the deliveries. What percentage of products go via the Red Sea, and what percentage goes around Africa? Prior to the conference with our logistics team, we verified the status. We cannot see any delays, so that is the good news. Even after all the havoc and the outbreak of war in Iran, we never had any issues with delivering on time. We learned it of the first crisis, the sea, so we are planning everything well in advance, so lead time is really good. As part of the world, as the return to the Suez Canal goes, most of our ship owners actually go around Africa, if not all of them. There are single voices that claim that they would wish to return to Suez.

Monika Wszeborowska: The current situation in the Red Sea may potentially impact the timeliness of the deliveries. What percentage of products go via the Red Sea, and what percentage goes around Africa?

Well, it looks like it was against 2026, but when you actually go back to 2025 or '23, then this level in the long run, uh, we consider to be repeatable or repetitive, so 50 plus, and we find it comfortable.

Speaker #1: Let this concept grow quite the platform grow but the ambition what the ambition is we shared 40 50 million a bit for next year as our goal.

Marcin Bójko: Prior to the conference with our logistics team, we verified the status. We cannot see any delays, so that is the good news. Even after all the havoc and the outbreak of war in Iran, we never had any issues with delivering on time. We learned it of the first crisis, the sea, so we are planning everything well in advance, so lead time is really good. As part of the world, as the return to the Suez Canal goes, most of our ship owners actually go around Africa, if not all of them. There are single voices that claim that they would wish to return to Suez.

The current situation in the Red Sea, um, made potentially impact is the timeliness of the delivery. So, what percentage of products go via the Red Sea and what percentage goes, um, around Africa prior to the conference with our Logistics team, we verified the status, we cannot see any delays. So that's the good news.

Speaker #1: 50 would be more than our expect above our expectation 40 would be very good but whether that would be 25 or 30 it still would mean that we are going according to plan.

Speaker #1: Could you make a note about the situation in Bangladesh and diversification of production markets. To sum up the situation in Bangladesh once again the situation in Bangladesh is the end of the transition period in January 2025.

And, uh, the outbreak of war in Iran. Uh, we, uh, never had any issues with delivering on time. We learned it from the first crisis and the Suez Sea. So, we are planning everything well in advance, so lead times are really good.

And as part of the world, as they return to the Suez Canal goes, most of our ship owners, um, actually go around Africa—if not all of them. There are

Marcin Bójko: That would, of course, reduce the time needed to cover the distance, but this is just the first voices. The ship owners keep exploring that potential, and I guess mid-November, we are going to sit and to discuss the freight rates for next year. Everything will become clear then. The media talk about the shortages of gas in Bangladesh and India. The shortages do impact the operations of factories. Can that impact our production? We do not have such information reaching us. As of now, we have the orders for the H1 of next year. We have placed the orders. There is no worrying information. The only thing, well, is awaiting the decisions of the higher prices that we actually did take into account in our guidance for next year. The question concerns likes of Sinsay.

Speaker #1: The transition period ended and since then the company that bought the Russian part of the LPP business were for their own account LPP paid its own invoices but I think that we all remember it was a very hard decision but a necessary one to make.

Monika Wszeborowska: The media talk about the shortages of gas in Bangladesh and India. The shortages do impact the operations of factories. Can that impact our production?

Speaker #1: We had to write off more than 800 million lotus by the end of last year when selling the company we wrote off 300 million so we lost a billion 100 million on this direction from unrecovered debts and a similar situation is for most suppliers from Bangladesh the reasons are unknown.

Marcin Bójko: We do not have such information reaching us. As of now, we have the orders for the H1 of next year. We have placed the orders. There is no worrying information. The only thing, well, is awaiting the decisions of the higher prices that we actually did take into account in our guidance for next year.

Speaker #1: Everything was communicated. We tried to locally to the it was there were attempts to allocate the debts to LPP locally. There were no reasons to do that but on the local market in Bangladesh there were quite a lot of media mess was about that and our aim place had some unpleasant bullying from the authorities and we cannot anything bad happen to our employees.

Single voices, that claim that they would wish to return to Suez. That would, of course, reduce the the time, uh, needed to cover the distance. But this is just the first voices. Uh, the ship owners keep exploring that, uh, potential. And I guess mid, um, November, we are going to sit and to discuss the freight rates for next year. Everything will become clear, then the media talk about the shortages of gas and Bangladesh in India, the shortages, um, do impact vibrations of, um, factories. Can that impact our production? We do not have such, um information reaching us, uh, as of now we have now the orders for the first half of uh, the next year we've placed the orders that there is no worrying information. The only thing well is awaiting

Monika Wszeborowska: The question concerns likes of Sinsay. Can you give us the specificity as per country concerning Sinsay like for likes?

Marcin Bójko: Can you give us the specificity as per country concerning Sinsay like for likes? Yes, we will give you the precise data in a moment. That is for the entire SS26 season. Apologies, that was the group level. So at the level of Sinsay, -3.8 the H1 of 2026, and actually all the regions were underwater. The only positive exception was Europe. This was Eastern Europe, Kazakhstan, Ukraine. So after the weaker previous year, we saw them rebouncing this year. Southern Europe with Romania, that constitutes the greatest share there, the like was below the average -3.8. The other part of the question is whether the negative like in Sinsay results from the growing competition, collection, or any other factors, and what does the situation look like in terms for Sinsay like in the Q3. As for the reasons, I guess there are multiple factors.

The decisions on the higher prices, that we actually did take into account in our guidance, and it's for, um, next year. The question concerns likes of Sinsay. Can you give us the specifics?

As per country.

concerning cine, like, for likes

Marcin Bójko: Yes, we will give you the precise data in a moment. That is for the entire SS26 season. Apologies, that was the group level. So at the level of Sinsay, -3.8 the H1 of 2026, and actually all the regions were underwater. The only positive exception was Europe. This was Eastern Europe, Kazakhstan, Ukraine. So after the weaker previous year, we saw them rebouncing this year. Southern Europe with Romania, that constitutes the greatest share there, the like was below the average -3.8. The other part of the question is whether the negative like in Sinsay results from the growing competition, collection, or any other factors, and what does the situation look like in terms for Sinsay like in the Q3. As for the reasons, I guess there are multiple factors.

Yes.

Speaker #1: They are the most important especially the everything was clear. So that was the reason why you made the decision to stop orders for two weeks and in that period many communication channels opened.

We will.

Give you the precise data at the moment, that's for the entire SS26 season.

Speaker #1: We need explained a lot of questions with the local authorities. We issued a shared statement with the biggest organization in the garment sector and our positive narration made its way and the that we have big orders in Bangladesh we grew with Bangladesh over the last couple of years and we want to continue the doing that and everything returned to normal.

Apologies, that was at the group level. So, at the level of SINSI,

Speaker #1: We our order level this year will be slightly higher than last year so we think that this situation has been solved. We are still in contact with Bangladesh and about diversification naturally the situation forced us to more actively look for diversification of sources this will continue to be local markets around Asia but we enter new markets in Central Asia.

Minus 3.8% the first half, 8% the first half of 2026, and actually all the regions were underwater. The only positive exception was Europe—was Eastern Europe: Kazakhstan, Ukraine. So after the weaker previous year, we saw them rebalancing this year, southern Europe, with Romania. That stands out as the greatest shift there, the like was below the average minus 3.8%.

The other part of the question is whether the negative, like in Sensei, results from the growing competition, collection, or any other factors. And what does the situation look like in terms for Sensei, like in the third quarter?

as for,

Marcin Bójko: We tried to address them in our initiatives that we outlined to you and the status of which we reported to you earlier today. The collection somewhat, we had some other price points and expectations from the customers, maybe performance. We are operating in the omnichannel. This is the source of our strength, so maybe we should focus on profitability more than on consumer traffic. These are communicating vessels, so this is something that, again, worked to our favor. Well, there are many factors here, the weather. Well, we keep developing in a very fast pace, so there is this natural level of cannibalization setting in that would account for up to 2 percentage points. That is something, again, that reduces our like for likes. So we can talk of a number of components here. But anyhow, our initiatives do work.

Speaker #1: I will not mention which but we see some positive options there. We are exploring the possibilities there to operationalize and to make the offers more in depth and specific.

The reasons why, I guess, there are multiple factors. We try to address them in our initiatives.

That we, um, outlined to you and the status of which we reported to you, um, earlier today.

Speaker #1: I think we have a very broad group of suppliers and we will be informed keeping you updated but the situation is addressed so we can focus on designing and 2027 and deliveries of good collections.

Speaker #1: Another question is about since what return on investment comes from the open store of a since and what is the policy for closing unprofitable stores and how much time do you give them.

Speaker #1: As we mentioned repeatedly or communicated repeatedly we show the paybacks that we earn on this concept at the moment it's about 17 months. We target payback period below 24 and margin a bit of at least 25%.

Marcin Bójko: By the end of the year, the logistics will keep on heating up. We will keep on optimizing our order-placing process, display of collections in the stores, and our work on the home collection. In the Q3, after the month and a half, so half of the quarter, we can see that the like is behaving well. It is above the average level expected. In August, we worked more with the margin. We had more of autumn than summer, so the H1 of August was lost. So ever since, the likes have really grown higher. I would not like to give you a very precise level because still we have the other half of the Q3 ahead. But as I said, in September, we are reaching those high single-digit levels. There are even days where the like is at the level of 10% or 12%. Another question concerns competition.

Speaker #1: These are the border conditions but we have some safety margin and we give our ourselves a bigger buffer as to closing whatever is unprofitable in the flows is currently analyzed and is cut off at the first possible opportunity when the first lease period expires we do not extend the lease period and will be optimizing it on the current basis and we're analyzing subsequent years for same say and in June when showing results for the first quarters we showed expectations for the prospects beyond 2027.

The Collection somehow we had some other price points and expectations from the customers. Maybe performance. We are operating in the Omni Channel. This is the source of our strength, so maybe you should focus on profitability more than on consumer traffic. These are communicating. That's also this is something that again worked our favor these. Um well there are many uh factors here. The weather or we keep developing in a very fast pace. So there is this natural level of cannibalization setting in uh that would account for up to 2 percentage points. That's something again, that reduces our like for like so we can um, Talk of a number of components here. But anyhow our initiatives, uh, do work by the end of the year, the logistics will keep on heating up. We'll keep on optimizing. Our order placing process display of collections in the stores and our work on the home collection in the third quarter, after the month and a half. So, um, half of the quarter, we can see that.

That and the like is behaving well. It is, um, above the average level expected in August. We worked more with the margin; we had more of autumn than summer, so the first half of August was lost. So ever since, the likes have really grown higher. I wouldn't like to give you a very precise level because we still have the other half of Q3 ahead, but as I said, in September, we are reaching those...

High single-digit levels. There are even days where the, like, uh, is at the level of 10.

Monika Wszeborowska: Another question concerns competition. Does the company regard it as a competition, and is the off-price concept of any threat to the group?

Speaker #1: We looked at that and for now the quality of the sensei bright is good enough and the results are good enough and we took care of the quality of the openings.

Marcin Bójko: Does the company regard it as a competition, and is the off-price concept of any threat to the group? We perceive it as a natural segment, a pretty different segment, something that was mentioned right at the beginning when the entire board talked to you in Warsaw. This market is a different segment. I believe there is a place for them to grow and for us to grow, including Sinsay or other brands of ours like Reserved. Reserved House has been showing it for a year that you can actually grow very fast. For two quarters also, Cropp has been showing that you can actually produce very good dynamics following our model. You've increased guidance for 2026, but at the same time, you kept the one you had for 2027.

Or 12%. Another question concerns competition.

Speaker #1: So maybe painful but necessary and by the end of the dent they profitable cutoffs and reductions of the opening plans translate into fewer many into fewer closings.

Marcin Bójko: We perceive it as a natural segment, a pretty different segment, something that was mentioned right at the beginning when the entire board talked to you in Warsaw. This market is a different segment. I believe there is a place for them to grow and for us to grow, including Sinsay or other brands of ours like Reserved. Reserved House has been showing it for a year that you can actually grow very fast. For two quarters also, Cropp has been showing that you can actually produce very good dynamics following our model.

Perceive it as.

A natural.

Speaker #1: So this is this is our leasing team is looks at the results on an ongoing basis and when a store is permanently unprofitable we close it.

Speaker #1: Allegra open an office in China. Are you planning to do that and if so what is the reasoning behind that. We have a very office in big office in China for many years and a big office in Bangladesh there are two main markets in terms of supplies we are very active for the online supplies we are only optimizing these activities the we want to optimize the value for the customers from there but the teams that are there constantly monitor and audit the factory so the cooperation must be on a adequate level and according to our standards no custom duties from India from the beginning of 2027.

Monika Wszeborowska: You've increased guidance for 2026, but at the same time, you kept the one you had for 2027. Is this conservative approach related to the period being distant and to there being a lot of uncertainty, or simply you've exhausted certain improvements, say.

Marcin Bójko: Is this conservative approach related to the period being distant and to there being a lot of uncertainty, or simply you've exhausted certain improvements, say. Well, of course, there is a lot of efficiency. That is why in our guidance in this part, we do wish to leave certain space in order to stay on the safe side. As mentioned, this macro effect that particularly still in Q3 is observable as persisting, that's the main reason for the guidance to be increased. We have a higher macro. Earlier on, we thought about 55%, 56% at a certain macro level. Now it increased, but taking the entire macro away and given our efficiency, we still reach the same level.

Marcin Bójko: Well, of course, there is a lot of efficiency. That is why in our guidance in this part, we do wish to leave certain space in order to stay on the safe side. As mentioned, this macro effect that particularly still in Q3 is observable as persisting, that's the main reason for the guidance to be increased. We have a higher macro. Earlier on, we thought about 55%, 56% at a certain macro level. Now it increased, but taking the entire macro away and given our efficiency, we still reach the same level.

Speaker #1: Have you calculated the impact on margin. Have you already moved production to India. We will be calculating that and communicating it to you. We already have the first margins calculated for the first half of 2027.

Improvements, well of course, there is a lot of efficiency—that is why in our guidance in this part, we do wish to leave a certain space in order to stay on the safe side. But as mentioned, this macro effect,

Speaker #1: It is also included in the guidance. So for now the answer is yes. We will see how the situation develops. It was the last question from our days.

Marcin Bójko: We'll keep emphasizing that in the long run, 55%, 56% is the safe and repetitive result, and this is something that, well, as this year has proven, is a very good year that we know how to use in terms of profit margin. In the long run, what is our main goal behind our initiatives is to grow on sales to offer repeated positive LFLs at a more balanced margin. How about the demand in Ukraine and the Baltic States? The question is whether in Romania you can see a lower level of competition. Is the demand in Romania stabilizing?

Speaker #1: Q&A session. Thank you very much. For your time. For your involvement into the Q&A session. We hope that we answered all the questions that you had.

Speaker #1: At the same time we would like to note the date of the 3rd of December. So say 3rd December we will have another conference summarizing the third quarter.

Monika Wszeborowska: How about the demand in Ukraine and the Baltic States? The question is whether in Romania you can see a lower level of competition. Is the demand in Romania stabilizing?

That particularly still in the third quarter is, is observable. Um, as persisting, that's the main reason for the guidance to be increased, we have a higher macro earlier on, we thought about 5556 at a certain micro level, now it increased by taking the entire macro away and giving giving our efficiency we still reach the same level. So we will keep emphasizing that in the long run. 555.56% is the safe and repetitive result. And this is something that well as this year has proven is a very good year. That we know how to use in terms of um profit margin in the long run. What is our main goal behind? Our initiatives is to grow um on sales to offer, repeated positive, L lfls at a more balanced margin.

Marcin Bójko: It is stabilizing, starting from the last part of the question, the retail consumption there is still much different from the historical data, but further focus says that the closer to the end of the year or the H1 of the next year, we are to expect a rebound. We hope that the likes will follow. This is what historically happened. The market is equally challenging to everybody. We simply need to be the best amidst everybody else in these conditions, and this is what we are trying to deliver. As for the other countries, those are actually very good questions. When you look at the Sinsay brand, I'm looking at likes, the Baltics and the Eastern Europe with Q2 now, these are the markets with very strong likes at a very good level.

How about the demand in Ukraine, and the vote States? And the question is, whether in Romania, you can see, uh, lower level of, um, competition is the demand in Romania. Uh, stabilizing. It is stabilizing starting from the last part of the question, the retail consumption, the

Marcin Bójko: Well, Ukraine, it is the second biggest market now at Capital Group, following a very good year, 2024. It was nicely stabilized, and we know that it was around 1.5 percentage point that was taken away by Ukraine in the entire Sinsay brand. Now, there is a reversal of the situation. There is certain standardization in terms of numbers, so the likes are on average, a single digit, strong kind of likes. Performance marketing related question. Has the cost of performance marketing changed when the tariffs were introduced and the pressure from Chinese players has decreased?

Is is still much, um, different from the historical data, but further Focus says that the closer to the end of the year or half of the next year, we are expecting a rebound. So we hope that the likes will follow this is what what historically happened. The market is equally challenging to everybody was simply to be the best. Um, I mean, everybody else in these conditions and this is uh, what we are trying to deliver as for the other countries and what is actually a very good question. So, when you, when you look at the Sensei brand, I'm looking at lives the bics and the Eastern Europe. The the second quarter on. Now these are the markets with very strong likes. Uh, it's a very good level so, well, Ukraine, uh, it is the second biggest market. Now, a capital group following a Very Good Year 2024. It was nicely stabilized and we know that it was around 1 and a half percentage point that was taken away by Ukraine in the entire Sensei brand now.

Monika Wszeborowska: Performance marketing related question. Has the cost of performance marketing changed when the tariffs were introduced and the pressure from Chinese players has decreased?

If there is a reversal of the situation, there is that certain standardization in terms of numbers. So, the likes are on average a single digit—a strong kind of likes. Performance Marketing related question,

Marcin Bójko: Cost-wise, per click, there is a slight positive effect, but I guess the entire market is benefiting from it because we can see, as mentioned, that the regulations have been in force since July and we see that Sinsay, as reflected in browsers, we, of course, looked at the entire market, but we saw that Sinsay has been doing pretty well and the cost of performance can be accelerated. We can increase expenditure, which we treat as investing into winning a new customer, keeping our customer with us. We know that any customer you attract, of course, has their expiry date, so to speak, but it is an investment for, let's say, three years to come. We are focusing now to improve the conversion. The question about turnover, what is a difference in the turnover of products across Reserved and Sinsay? These turnovers are pretty similar in Sinsay.

Has the cost of performance marketing changed? When the tariffs were introduced and the pressure from Chinese players decreased, the cost per click dropped by half.

There is a slight positive effect, but I guess the entire market is benefiting from it, because—

We can see as mentioned.

That the regulations, uh, have been enforced.

Since July, we see that, as reflected in browsers, we of course looked at the entire market, but we saw that since then, it has been doing pretty well and the cost of performance can be accelerated. We can increase expenditure, which we treat as investing into winning a new customer or keeping our customer with us. We know that any customer you attract, of course, has their—

Monika Wszeborowska: The question about turnover, what is a difference in the turnover of products across Reserved and Sinsay?

Marcin Bójko: These turnovers are pretty similar in Sinsay. Owing to the volume and lower price point, it is, well, two weeks faster, I'd say.

Expiry, so to speak, but it is an investment for, let's say, three years to come. So we are focusing now to improve the conversion. The question about turnover—what is the difference in the turnover of products across Reserved and Sinsay?

Marcin Bójko: Owing to the volume and lower price point, it is, well, two weeks faster, I'd say. The question concerns the category of home. We already mentioned the home category, but the question is, what categories in general in the home collection are the strongest and which are the weakest, and what are the sales of the home collection at the moment? The home collection was the only department in Sinsay that in every month of the Q1 of this year noted positive likes for likes. I don't want to tell you which product groups are the best or the worst and on which we focus, because this is some kind of market information. I think that the information that I can share with you is that we focus on optimizing the extension of the brand.

These turnovers are pretty similar in sense.

Monika Wszeborowska: The question concerns the category of home. We already mentioned the home category, but the question is, what categories in general in the home collection are the strongest and which are the weakest, and what are the sales of the home collection at the moment?

I went to the volume and lower price point. It is, well, two weeks faster, I'd say.

And the question concerns the category of Home.

Uh, we already mentioned the Home category, but the question is: what categories, in general, in the Home Collection, are the strongest and which are the weakest, and what are the...

Sales.

Marcin Bójko: The home collection was the only department in Sinsay that in every month of the Q1 of this year noted positive likes for likes. I don't want to tell you which product groups are the best or the worst and on which we focus, because this is some kind of market information. I think that the information that I can share with you is that we focus on optimizing the extension of the brand.

Of the Home Collection at the moment. The Home Collection was the only department in Sinsay that, in every month of the first quarter of this year, noted positive likes.

I don't want to tell you which product groups are the best or the worst, and which ones we focus on, because this is some kind of market information.

Marcin Bójko: We reduce the extension of the brand and we increase the depth of the brand, so we will increase the choice in the best products. When can we expect the first results of the Place brand that you recently launched? Will there be any data in the report for the Q3? We are thinking how to report that, but the scale, even according to reporting requirements, is still negligible in the GMP scale. It's just hundreds, thousands of Polish złoty in the month scale rather than millions of billions. It is a very early stage. We focus on quality growth. We want to select categories wisely so that they fall into Sinsay already offers. We can see that it already works. Quite a many customers get to us through Marketplace. Even they do not buy anything at Marketplace, but quite a large percentage buys things from Sinsay.

Marcin Bójko: We reduce the extension of the brand and we increase the depth of the brand, so we will increase the choice in the best products.

Monika Wszeborowska: When can we expect the first results of the Place brand that you recently launched? Will there be any data in the report for the Q3?

I think that the information I can share with you is that we focus on optimizing the extension of the brand. We reduce the extension of the brand, and we increase the depth of the brand. So, we will increase the choice in the best products. When can we expect the first results?

Marcin Bójko: We are thinking how to report that, but the scale, even according to reporting requirements, is still negligible in the GMP scale. It's just hundreds, thousands of Polish złoty in the month scale rather than millions of billions. It is a very early stage. We focus on quality growth. We want to select categories wisely so that they fall into Sinsay already offers. We can see that it already works. Quite a many customers get to us through Marketplace. Even they do not buy anything at Marketplace, but quite a large percentage buys things from Sinsay.

Regarding the place brand that you recently launched, will there be any data in the report for the third quarter? We are considering how to report that.

But the scale, even according to reporting requirements, is still negligible in the GMT. The scale is just hundreds of thousands of Polish zloty in the month, rather than millions or billions. It is at a very early stage—we focus on quality growth.

Marcin Bójko: We can see the synergic movement as one of our Marketplace assumptions is already working, but the scale is still limited. Let this concept grow, let the platform grow.

Magdalena Kopaczewska: The ambition is we shared 40, 50 million, a bit for next year as our goal. 50 would be above our expectation, 40 would be very good, but whether that would be 25 or 30, it still would mean that we are going according to plan. Could you make a note about the situation in Bangladesh and diversification of production markets? To sum up the situation in Bangladesh, once again. The situation in Bangladesh is the end of the transition period in January 2025. The transition period ended, and since then, the company that bought the Russian part of the LPP business worked for their own account. LPP paid its own invoices, but I think that we all remember it was a very hard decision, but a necessary one to make. We had to write off more than 800 million PLN by the end of last year.

We want to select categories wisely so that they fit in. Since there are already offers, we can see that it already works to some extent—customers get to us through Marketplace. Even if they do not buy anything at Marketplace, quite a large percentage buy things from us since then. So we can see the synergic movement, as one of our Marketplace assumptions is already working, but the scale is still limited. This concept could grow more as the platform grows.

Monika Wszeborowska: Could you make a note about the situation in Bangladesh and diversification of production markets?

But the ambition or the ambition is we shared 40, 50 million, a bit for next year. As our goal, 50 would be more than our expect above our expectations. 40 would be very good but whether that would be 25 or 30, it still would mean that we are going according to plan. Could you make a note about the situation in Bangladesh in the diversification of product?

Magdalena Kopaczewska: To sum up the situation in Bangladesh, once again. The situation in Bangladesh is the end of the transition period in January 2025. The transition period ended, and since then, the company that bought the Russian part of the LPP business worked for their own account. LPP paid its own invoices, but I think that we all remember it was a very hard decision, but a necessary one to make. We had to write off more than 800 million PLN by the end of last year.

Action markets to sum up the situation in Bangladesh once again.

the situation in Bangladesh is

Magdalena Kopaczewska: When selling the company, we wrote off 300 million PLN, so we lost 1 billion and 100 million PLN in this direction from unrecovered debts. The similar situation is for most suppliers in Bangladesh. The reasons are unknown. Everything was communicated. There were attempts to allocate the debts to LPP locally. There were no reasons to do that, but on the local market in Bangladesh, there quite a lot of media mess was about that, and our employees had some unpleasant bullying from the authorities. Anything bad happened to our employees there, the most important, especially that everything was clear. That was the reason why you made that decision to stop orders for two weeks. In that period, many communication channels opened. We explained a lot of questions with the local authorities.

The end of the transition period in January 2025—the transition period ended. And since then, the company that bought the Russian part of the LPP business works for their own accounts, its own invoices. But I think that we all remember, it was a very hard decision, but a necessary one to make. We had to write off more than 800 million zlotys by the end of last year. When selling the company, we wrote off.

Uh, 300 million. So we lost 1 billion 100 million in this direction.

Uh, from uh, unrecovered debts and the similar situation is for most suppliers in Bangladesh. The reasons are known. Everything was communicated. We tried to locally to the the it was there were attempts to, uh, allocate the debts to lpp locally. There were no reasons to do that, but on the local market in Bangladesh, there were quite a lot of media Mass was about that in our aim Place had some unpleasant uh, bullying from the authorities and we cannot anything that happened to our employees. They are the most important especially the

Magdalena Kopaczewska: We issued a shared statement with the biggest organization in the garment sector, and our positive narration made its way, that we have big orders in Bangladesh. We grew with Bangladesh over the last couple of years, and we want to continue doing that, and everything returns to normal. Our order level this year will be slightly higher than last year. We think that this situation has been solved. We are still in contact with Bangladesh. About diversification, naturally, the situation forced us to more actively look for diversification of sources. This will continue to be local markets around Asia. We enter new markets in Central Asia. I will not mention which, but we see some positive options there. We are exploring the possibilities there to operationalize and to make the offers more in-depth and specific.

Everything was clear. So that was the reason why you made that decision to stop orders for two weeks. And in that period, many communication channels opened. We explained a lot of questions with the local authorities. We issued a shared statement with the biggest organization and the government.

Sector and our positive narration made its way. Um, that we have big orders in Bangladesh, we...

Grew with Bangladesh over the last couple of years, and we want to continue doing that and have everything return to normal. We

Situation has been solved.

We are still in contact with Bangladesh, and, naturally, about diversification.

The situation forced us to more actively look for the verification of sources.

This will continue to be local markets around Asia.

Magdalena Kopaczewska: I think we have a very broad group of suppliers. We will be keeping you updated, but the situation is addressed, so we can focus on designing in 2027 and deliveries of good collections. Another question is about Sinsay. What return on investment comes from the open store of a Sinsay, and what is the policy for closing unprofitable stores, and how much time do you give them? As we mentioned repeatedly or communicated repeatedly, we show the paybacks that we earn on this concept. At the moment, it is about 17 months. We target payback period below 24 and margin EBITDA of at least 25%. These are the border conditions, but we have some safety margin, and we give ourselves a bigger buffer. As to closing, whatever is unprofitable in the flows is currently analyzed and is cut off at the first possible opportunity.

But we are entering new markets in Central Asia. I will not mention which, but we see some positive options that we are exploring. These are possibilities that could lead us to operationalize and to make the offers more in-depth and specific. I think we have a very broad group of suppliers.

We will keep you updated as the situation is addressed.

Monika Wszeborowska: Another question is about Sinsay. What return on investment comes from the open store of a Sinsay, and what is the policy for closing unprofitable stores, and how much time do you give them?

So we can focus on designing in 2027 and deliveries of good collections.

Another question is about Sinsay. What return on investment comes from the open store, and what is the policy for it?

Closing a profitable store. And how much time do you give them?

Magdalena Kopaczewska: As we mentioned repeatedly or communicated repeatedly, we show the paybacks that we earn on this concept. At the moment, it is about 17 months. We target payback period below 24 and margin EBITDA of at least 25%. These are the border conditions, but we have some safety margin, and we give ourselves a bigger buffer. As to closing, whatever is unprofitable in the flows is currently analyzed and is cut off at the first possible opportunity.

As we mentioned repeatedly or communicated repeatedly, we show the paybacks that we have on this concept at the moment is about 17 months. We target a payback period below 24 and a margin of at least 25%.

These are the border conditions, but we have some safety margin and we give ourselves a bigger buffer as to closing, whatever it is.

Magdalena Kopaczewska: When the first lease period expires, we do not extend the lease period, and we will be optimizing it on a current basis. We are analyzing subsequent years for Sinsay. In June, when sharing results for the first quarters, we showed expectations for the prospects beyond 2027. We looked at that, and for now, the quality of the Sinsay brand is good enough, and the results are good enough. We took care of the quality of the openings. So maybe painful but necessary, and by the end of the day, the profitable cut-offs and reductions of the opening plans translate into fewer closings. So this is our leasing team looks at the results on an ongoing basis, and when a store is permanently unprofitable, we close it. Allegro opened an office in China. Are you planning to do that? If so, what is the reasoning behind that?

Unprofitable inflows are currently being analyzed and are cut off at the first possible opportunity, when the first lease period expires. We do not extend the lease period and will be optimizing it on the current basis, and we are analyzing subsequent years for the same. In June, when sharing results for the first quarter, we showed expectations for the prospects beyond 2027. We looked at that, and for now, the quality of the sincere bright is good enough and the results are good.

Uh, enough, and we took care of the quality of the openings. So maybe painful but necessary, and by the end of the day, they are profitable cut-offs and reductions of the opening plans.

Translate into fewer many interviewer closing. So this is

Monika Wszeborowska: Allegro opened an office in China. Are you planning to do that? If so, what is the reasoning behind that?

Magdalena Kopaczewska: We have a very big office in China for many years and a big office in Bangladesh. These are our two main markets, in terms of supplies. We are very active for the online supplies. We are only optimizing these activities. We want to optimize the value for the customers from there, but the teams that are there constantly monitor and audit the factories, so the cooperation must be on an adequate level and according to our standards. No custom duties from India from the beginning of 2027. Have you calculated the impact on margin? Have you already moved production to India? We will be calculating that and communicating it to you. We already have the first margins calculated for the H1 of 2027. It is also included in the guidance. So for now, the answer is yes, but we will see how the situation develops.

This is our leasing team—looks at the results on an ongoing basis. And when a store is permanently unprofitable, we close it. Allegra opened an office in China—are you planning to do that? And if so, what is the reasoning behind that? We have a big office in China; we've had a big office in China for many years, and the big office in...

Two main markets in terms of supplies,

we are very active for the online supplies. Uh, we are only optimizing these activities. The to, we want to optimize the value for the customers from there. But the teams that are there constantly

Monitor and audit the factory, so the cooperation must be at an adequate level. And according to our standards,

Monika Wszeborowska: Have you calculated the impact on margin? Have you already moved production to India?

Magdalena Kopaczewska: We will be calculating that and communicating it to you. We already have the first margins calculated for the H1 of 2027. It is also included in the guidance. So for now, the answer is yes, but we will see how the situation develops.

No cost and uses from India from the beginning of 2027. Have you calculated the impact on margin? Have you already moved production to India? We will be calculating that and communicating it to you.

We already have the first margins calculated for the first half of 2027; it is also included in the guidance. So for now,

The answer is yes.

Magdalena Kopaczewska: It was the last question from our today's Q&A session. Thank you very much for your time, for your involvement into the Q&A session. We hope that we answered all the questions that you had. At the same time, we would like to note the date of 3 December. So save 3 December, we will have another conference summarizing the Q3. So please save this date and join us on 3 December. Once again, thank you for today and see you in December.

Monika Wszeborowska: It was the last question from our today's Q&A session. Thank you very much for your time, for your involvement into the Q&A session. We hope that we answered all the questions that you had. At the same time, we would like to note the date of 3 December. So save 3 December, we will have another conference summarizing the Q3. So please save this date and join us on 3 December. Once again, thank you for today and see you in December.

But we will see how the situation develops. That was the last question from our Q&A session today. Thank you very much.

For your time.

Thank you for your involvement in the Q&A session. We hope that we answered all the questions that you had.

At the same time, we would like to note, uh,

The date is the 3rd of December, so please save the 3rd of December. We will have another conference summarizing the third quarter.

So, please save this date and join us on the 3rd of December. Once again, thank you for today, and see you in December.

Operator: Every great story begins with a drawing. One line, one idea. A whole world comes to life. Filled with wonder. Powered by imagination. Ready to explore. Draw, dream, discover.

Like, slowly begin with the tooling.

1 line.

1 idea.

A whole world comes to life.

Filled with wonder, powered by imagination.

Ready to explore.

Operator 2: It has been a busy day. Yeah, I am heading out of work now. See you in the evening.

Draw dream. Discover

Yeah, I'm heading out of work now. If you need anything,

Operator: Every great story begins with a drawing. One line, one idea. A whole world comes to life. Filled with wonder. Powered by imagination. Ready to explore. Draw, dream, discover.

Story begins with the tooling.

1 line.

1 idea.

A whole world comes to life.

filled with wonder,

Ready to explore.

Operator 2: It has been a busy day. Yeah, I am heading out of work now. See you in the evening.

Discover.

It's been a busy day. Yeah, I'm heading out of work now, receiving these things.

this is,

Operator: Every great story begins with a drawing. One line, one idea. A whole world comes to life. Filled with wonder. Powered by imagination. Ready to explore. Draw, dream, discover.

Every play story begins with a toy.

1 line.

1 idea.

A whole world comes to life.

filled with wonder,

Ready to explore.

Operator 2: It's been a busy day. I'm heading out of work now. See you in the evening.

Discover.

When a busy day.

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