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Can you hear me well? I have a small doubt if you can hear me. So I'd like to welcome you very cordially on behalf of the management board. My name is Marcin Czyczerski. And along Karol PĂłltorak, I'm going to have the pleasure of running today's presentation for the Q3 results, and we'd like to tell you a little bit about what we're working on in the company, what sort of impact it might have on the company's results in upcoming quarters.
As a matter of standard practice, we'd like to show you the highlights for CCC. And these are the most important figures describing what the group looks like at the end of Q3. We have top line moving up by 21%, what's very important. This increase is to a large extent in e-commerce. So we have the growth of eobuwie. So then e-commerce has gotten started here in Poland as well. And so it's got PLN 12 million in revenues in Q3. It's outside of Poland as well. So we have a slight negative LFL, like-for-like, in our brick-and-mortar stores.
So we're looking at the amount of financing. Well, basically, this is our inventories, the trade receivables, and we've got an increase in that financing by PLN 282 million. That shows how effective we are and efficient, but still a lot for us to do, even though we're having successes. Then we can see that there's more and more online as a percentage of our total sales. So we're at 25%, having moved up from 21%. We're moving in the direction of our strategic target of having a 30% share in 2020. So CCC is present now in 29 countries. What has happened? This applies above all to the GCC region, so the Arabic countries. We have another 3 countries: Saudi Arabia and Bahrain, Oman. We should not forget that the 5 markets GCC, the total population there is larger than in Poland, and the buying power there is substantially higher. So we have a very trusted franchise partner there. And so this portends well for the growth of our business.
Over the course of Q3, we have added nearly 107 stores and some 90,000 square meters. At present, we have 725,000 square meters of floor space. What's happening over this time period in terms of the quarter's results or that will contribute a lot in upcoming quarters? These events, we have 2 bigger blocks or buckets. The first one is the execution of our strategy in being the leader in the omnichannel, and then we have product developments. So we're selling through our mobile app. This took place in July of this year. Then we received an award as a company for having the best mobile app, so this pleases us.
In September, we started to sell in e-commerce through eschuhe.ch and then we replaced an ineffective e-commerce channel there in Switzerland. We're very pleased with the growth there. Switzerland has one of the most pronounced e-commerce markets, and it's one of the most profitable for commodities.
Then we have the rollout of MODIVO. MODIVO is now present in 10 markets. We've got sales of about PLN 10 million up until now. As we said, this is an important direction or avenue of building our omnichannel presence.
Then we have the Gino Rossi offering in our network. So Karol will say a few words about that. Then we have DeeZee as a sponsor of the Top Model program, where we're promoting fashion amongst our younger client group. We're very pleased with the results. We're seeing pronounced traffic through our DeeZee web channel.
Then we've opened the Creative City Concept here, sitting in the center of this. We can see how positively this is influencing the figures we deliver in terms of showing our products quoting us also in fashion magazines. And this shows how strong the potential we have is in the CCC Group. And so this is something that began to operate in September of this year.
Now if we talk about Gino Rossi, I'll ask Karol to take the floor.
We can see the end line, the finish line for our restructuring process, which we commenced and then a new phase will begin. So we can see that we'll complete the most hot -- the hottest products -- projects by the end of the year. And then we're going to be able to look and scrutinize more closely Gino Rossi and it will be helpful for the company. So we'll have -- we'll be in the black in terms of EBITDA as opposed to what we saw in 2018 and 2019 there. And this is a company that will earn its keep as Gino Rossi.
How much we paid for that? As you can see, so PLN 70 million was the cost of equity and debt. Then we've recapitalized it to the tune of PLN 50 million to get rid of all debts and to basically get on the straight path. So we have the brand, the assets, production assets, sales network, warehousing capacities and we have production capacity in the team. This was a tough period of 7 to 8 months.
So in the Warsaw, Gino Rossi office, was some 30 people on their own office space. And so now, of that 35 that are there working in our office space, so the strongest talents stayed onboard and have the opportunity to continue working for us. So it wasn't an easy process. So for next year, we're going to have logistics moving into Polkowice. And so closing some of the unprofitable stores that don't portend well. So the EBITDA indication is more or less what we're looking at here. I mean, 2021 will deliver the true results.
So then if we look at the sales of Gino Rossi in our stores, we're happy with the 120,000 pairs of shoes sold. And so we've got an additional margin of PLN 40, PLN 50 on top of the products that we have in our products we've had up to now. So we've added a second engine. So I hope you've seen the Bella Vita campaign. And so we want to make sure that this brand is well groomed and can stimulate customer activity. I think that's more or less what I wanted to tell you about Gino Rossi.
So basically, we wanted to make sure that we can sell more expensive shoes in our stores, above the PLN 200. So PLN 200 per pair of shoe is no longer a breaking point. So we can see that the shoes are selling better and better in CCC. So this offers a good forecasting element for the future.
So if we can go back to September 2018, and we had the opportunity to host most of you in Polkowice during Investor Day, we showed you some simple graphics what the mix of our products is, the gray showed our legacy products. And then we had Lasocki, where we -- this is our flagship product, and we are selling more than 20 million pairs a year. So this is a brand that millions of Poles love.
Then as I mentioned, we -- 2 conferences ago, I mentioned that we begin doing something. We're not always perfect at the beginning. If somebody is able to do something perfect the first time, he's worthy of envy. But when we are reintroducing these with the second season, we can show you how much potential there is in these categories. So since September of this year, we sold 120,000 pairs of shoes of Gino Rossi. We're selling quite a few shoes of DeeZee. We've got different category groups of clients. And so we're selling 2.5x more in this -- in each category. So we have 960,000 sold pairs of shoes for DeeZee. So we see that we're moving up towards 18%. And so we're one of the biggest distributors of sports shoes in Poland.
And so this shows you how much we can really do in the course of the year by being consistent. So we have new customers. We have higher ticket value. We can see the social media, brand recognition is climbing because all of our categories have very loyal customers. And we've been able to onboard the omnichannel approach to the DeeZee brand, for example. And so these are the things that we've been able to do over the course of the last year and we're quite pleased with them. But at the same time, this is the beginning of the beginning. We've talked about product development. We've expanded the category, but we're doing intense work on all of these categories, and you'll see that in our winter collection. But I think if -- I can guarantee you that you'll be very interested to see our summer/fall collection of 2020.
So this slide shows you what's happening at the interface between ourselves and the customer. There's a lot more of these interface points. The structure might seem complicated, but we have a very simple approach. We have a lot of opportunities to meet with our customers, different show windows different products. Our logistics are tools at the joint customer face. We will make sure that the entire group has a single customer view, and this is something that we'll continue to tweak in 2020. We want to drive it. We want to manage it, the average sales per client, the margin per customer. So basically, this is per customer. This is how, in fact, we are managing our sales approach.
One example of what we see on the next slide, as we manage revenue or income per client. We've got the full-fledged e-commerce in CCC. So you can see, customers can see our customers and we'll leave to the side eobuwie but also CCC, we can see that the average sale per customer is on the rise, whether or not -- depending on whether or not a customer is selling through a single or is buying through a single channel, 2 channels or 3 channels. So the plus 50% is not something you should attach excessive importance to. We've got a few months of data, but this is one of the key things that we have in mind as we try to raise our share of wallet, one of the next steps that awaits us. That's why we've written it down here.
We will endeavor to digitize our customers. This is not something that's going to be very easy. So our customers in eobuwie are digital by their very nature, but in CCC, we'll have to do more education. We'll have to expend more effort to be brief and succinct. So our staff have to be digitized, and we're paying attention to both of those groups. So this is work that has to be done. This is not something that can happen from month-to-month or quarter-to-quarter, where -- this is work that we're going to have to do over 2020.
The next thing is the rollout of CCC e-commerce into other countries. We're looking at countries offering the greatest upside potential. And so in Q1 2020, we plan to open another 4 or 5 countries. And then we'll have a mobile app, as Marcin mentioned. This is something that's been scored well by observers in the industry as well as by customers. And so you can see it in Google Play or App Store -- Apple store to understand what their app is looking like.
Let me encourage you to utilize our application because it has very nice functionalities. Very few companies can brag about that. So you can test this ability to look for a product using the product picture. So I'd invite you to come and look at it in -- through our network.
Asset management and the company, very important to us is sustainable development. So we've done some important things here. For example, in the supply channel, we have a code of conduct for our suppliers. Some 40% are suppliers who've been working with us on an exclusive basis for many years. And so we've got people in Asia, some 30 people, who visit factories and are able to oversee those factories. We have also a policy to manage chemical substances. We subscribe to European standards and regulations and also to Swiss standards, which are much higher. One of the things that we can brag about, we sold the last plastic bag that was available in our network and now only ecobags, paper bags are available. And they have the -- they bear the logo of the UN. And so we are attaching great importance to this. And we made some major accomplishments. And even though we're just beginning, we've just started to build our brand utilizing UNICEF and so also, our cycling team. So we have 3 cycling teams: we have the professional, the UCI; we have Marianne Vos, the best cyclist, female cyclist in the world; and then we have also the development team. So it's the best in the world development team.
And so what we've been able to do, through a variety of channels, we've been able to showcase our efforts. So this is a team that's in UCI. So 2.1 billion people in the world could see our brand about the CCC team. We have a large number of clients who love or very much like the CCC brand. We have an increase of some 17%. And so this is something that really influences our ability to sell. I think we're just taking the first steps here. The overall idea is to bring professional cycling into the realm of being Poles' preferred sport, so utilizing their own bikes, changing their lifestyle, also treating it as a sporting discipline and at the same time, having in mind that we've got a very good female cycling team, young women who are very committed and dedicated and coupling that with our products, and this is one of our tasks that we have in 2020 in order to promulgate the CCC team.
If we look at the financial results. So this is the first time in a long time that we've been able to say that our top line has moved up by some 20%. At the same time, profits moved faster -- moved upwards, faster than our costs. Our costs have fallen. So basically, all of these factors have fleshed out together very nicely.
So even though at the operating result level, this is not something that we can say. So we've had a loss on FX changes of PLN 26 million. So last year, in Q3, we had a positive result. And here, it's slightly negative. And so this shows that the result year-on-year is a little bit softer. So we'll talk about each one of these line items in just a moment.
One of the major drivers of our top line growth is the enlargement of floor space. So this has moved up by some 64,000. And so we have to remember that has happened mostly in Poland, but we're enlarging floor space, where these sales parameters have been very positive. And it's under the condition that we have lower lease or rental costs. And so that means on a pro rata basis, our sales per square meter grow, so sales density. And so that means that we're able to convert that into bigger -- new and bigger stores. So eobuwie has 15, 16 stores. By the end of next year, we want to have some 30 stores.
If we look at CEE, we can see the growth in Romania, Bulgaria and Slovenia. So in Romania and Bulgaria, where we want to have at least 100 stores, and Romania, so it should be our second biggest European market. And we've got very strong results there. And so the biggest growth in other countries took place in Russia. We have a record high number of closures in Poland. And we're opening stores, but at the same time, we scrutinize their results and we close stores. We've closed a large number of those stores, and this is true also in Western Europe.
If we look at like-for-like sales, it's not 100% comparable because we're changing, of course, the product range. Having the low base in 2018, this is disenchanting. But we should also have in mind, this includes 2017 when we had like-for-like moving up by some 50% in some months. And so in Q3, we're at like 30%. We should have that in mind. So our e-commerce top line is up by 43%. We've now topped PLN 1 billion. So we can say that double-digit growth is a very positive phenomenon, having in mind the extent of our annual revenue.
At the same time, the share of e-commerce is on the rise, we're at 25%. This is in line with management expectations. At the end of the year, we want to be somewhere between 26% and 28%, and that would give us a lot of comfort that we'll be able to achieve our goal in 2020 of having e-commerce with a share of 30%. So it's grown by PLN 100 million. This is PLN 100 million in sales generated through e-commerce sales channels. So as we combine retail with e-commerce, we are the leader in the industry. We can also see wholesale sales. It's up by nearly PLN 50 million. And so we'll show this more extensively starting in the next conference.
This is 5% average of the swing in Greece, and Bulgaria had the biggest upticks. Poland, it continues to grow strongly, even though it's a developed market, but it's no longer the top player. It's been exceeded or surpassed by Central and Eastern Europe.
If we look at the profitability, we had some one-offs at the beginning of Q2 in eobuwie in marketing expenses. This is something that we've put behind us. Every month now, starting from April, so starting in May, we have more and more improvement in our profitability measured by the EBITDA factor. So we've moved from PLN 29 million to PLN 33 million. This is less than, say, last year in terms of margin, but we're moving in the direction of the double-digit figure we stated. Every month is better than the previous month. So September was nearly twice as good as September in 2018. So we've got a good progression, and this underpins our hope for future results in subsequent months.
So gross margin continues to improve. So if we look at our gross margin here, we can say that it's growing in every single sales channel. Please remember, I have a lot of one-on-one discussions, even if each one of these sales channels is improving its gross margin. But in total, the gross margin can fall because of changes in the mix of channels, channel mix and the shifts between CCC and eobuwie. So this type of situation can appear. In this quarter, every single channel improved as well as overall we improved.
We are pleased that the retail gross margin is a bit better. Even though it's just small bit, it's still better. So we have third-party brands. Well, it's better than what we anticipated, but we have a lower margin on the third-party sports shoes, and that's why the product mix is changing in retail.
What's more, starting in January of this year, the policy we have is sell out old stock and hits. So we're trying to sell out the older shoes more quickly. This has an impact on the gross margin. And despite that policy, we continue to improve our gross margin. So September was the best month and the new collection. And this shows us how the new collection was received, and this is one of the best and most important events if we look at costs, and so we've decomposed this. The main cost driver is our expansion and the growth of eobuwie and the growth in space of some 90,000 year-on-year. And then we had M&A. We took over 2 companies. Everything else is in our base. So if we look at our base, PLN 652 million, our growth is in marketing. Then we have, once again, growth in eobuwie, but a decline in CCC. So we spent more on marketing in eobuwie and less in CCC. So we have very good recognitions. We're starting to build our marketing budget differently. So we continue to raise the issue of cost discipline, and we're anticipating positive impacts in the future.
Then the FX losses. I already talked about that. And the performance, the costs of store operations. And then PLN 12 million because of [ FEGLI ]. And so part of this was offset by FX gains and losses, but we're quite pleased with the cost discipline, and we're eliminating redundant costs with [ FEGLI ]. So if we look at cost per square meter, we have a very positive phenomenon where they're down from PLN 270 million to PLN 262 million. And elsewhere, they're pretty flat. If we were to correct or adjust for FX gains and losses, this would suggest that there's been no change in press. Well, these figures differ a bit from what we showed you last quarter, all of them have been updated to include [ FEGLI ] because we've got [ FEGLI ] now for more than 20 months on board. And so there -- and [ FEGLI ] is already fully included in our base figures. So if we look at our EBIT, so we get an improvement in Poland of PLN 22 million as well as in eobuwie. And so then we have a negative impact in the other countries, where Romania has improved its results by PLN 20 million -- by PLN 2 million, excuse me. To a large extent, however, this was offset by the loss -- FX loss and SG&A expenses as well as the costs of services, payment services in eobuwie. And so this is roughly PLN 5 million of that figure. So in total, our EBIT is minus PLN 60 million -- PLN 16 million, but it would be much higher had it not been for some of these one-offs.
So if you look at our stock, you can say that our stock has never been better, as far as I remember. If we look at the structure, the composition of our stock, it's not in our warehouse but in our stores. So we've sold off all of the product tails we've had in previous collections. Even in 2017, it's still a full-fledged collection. It's only 5% of the total collection. All of the others have been reduced by some 90-odd percent compared to the previous year. So I can tell you quite clearly and with full accountability, we have a stock that's fully up to date and it's fallen by 12% year-on-year.
So compared to last year, it's in stores as opposed to the warehouses. So we've got stock that's exposed to customers by more -- it's up by more than PLN 200 million. So there's a real chance that it could be sold as opposed to sitting in our warehouse. It would have been 25% as opposed to 12% had we not had new brands, Gino Rossi, DeeZee, [ Lasocki ]. So bags, suitcases, things that we didn't have last year. So the performance would have been even higher had we not expanded the categories. And so in e-commerce, we're growing much faster our top line than the stock line. So this is something very important.
If we look at the cash conversion cycle, this is something that's improved. We're down to 57 days, down by 57 days. So we're now at 125 days since the -- previously, we're well above 200. And so we continue to see opportunities to improve. And so we'll continue to work on that.
If we look at our working capital, we're continuing to improve the financing of suppliers, some PLN 282 million. We're going to be able to continue that. Every additional stair-step we overcome will be more difficult, but we'll continue moving forward.
If we look at cash flow, operating cash flow, we can say that FX gains and losses are the major item here.
If we look at our investing cash flow, logistics and store development were the major factors. But these investments are -- this is the last -- these are the last months when we'll see them at such a high level. So we'll spend nearly PLN 700 million on CapEx at the end of the day. In subsequent years, we shouldn't exceed PLN 200 million. So we can say that we've got the peak behind us, and so this sustainable development and monetization of projects we've run are things that will be much lower in subsequent years in terms of our spend.
If we look at net debt, the major reason is the investments peak we now have behind us. If we look at net debt-to-EBITDA, we're at the maximum acceptable levels. So we're declaring that we'll bring this parameter down over time. This is linked to a lower profitability, measured by EBITDA in recent quarters. As you recall, we have some fortune when it comes to one-offs, and this has moved through other expenses. So we had a provision for a decision by the tax authorities. It's a provision of more than PLN 20 million, although we don't concur with the decision made by the tax authority in Lower Silesia. So this is tax on civil transactions. But because of changes, we weren't able to change things. But anyway, our EBITDA is not as high because of some of these factors. And so if we were to adjust for all of these events, we could see that for the first 9 months of the year, we would have had a result that's higher by roughly $100 million.
So to recap what are the good things and the bad things, so we'll continue the development of our new markets. So we're intensifying our activity on those markets where we're present. We're not adding new markets. GCC is very important to us. We have growth in gross margin across all the segments. This is something that pleases us extensively.
We have to offset various events, which mean that we have to struggle a little bit more. One of the things that I'd like to convey to you, even if we have lower gross margins, like in the sports shoes, the gross profit per pair of shoes is substantially higher than we have in ours. So we can see this dogma has a business constraint. So our CCC EU online channel is seeing strong top line growth. We have new product categories, which appear for the first time.
So Gino Rossi, we sold 125,000 pairs of shoes. We anticipate by the end of the season, we will have sold several hundred thousand pairs more. And we're earning PLN 50 more per pair of shoes. For example,
in Lasocki, we continue to improve our working capital. This is one of our brand attributes.
What are the negatives? Western Europe continues to be an unprofitable segment. So we'll probably close Sweden for eobuwie. This shows it's not worthwhile to develop every market. So it's an unprofitable segment, so we plan to wind that down gradually. And then our marketing spend is still quite high in eobuwie. And we have a cap of 15%, and we're going to lower that a little bit next year.
So ladies and gentlemen, we want to say a few words about the things we're going to be working on over the next few months and what sort of work we want to deliver to you. We're listening to what you say. Sometimes, you say that we don't have a systematic approach and so we want to put this into proper buckets that are properly named. And as we report the results, we want to align our reports to those buckets. And so we're working very strongly on a strategy review. And we want to have a full fledged, full-value strategy, which somewhere between December and January, we would convey to you. We're an open company. We read the trends. We meet with our partners. We meet frequently our competitors. We have a lot of awareness about how the market is changing and we see the major transformation of the retail market. We have specific measures being taken for this proposal.
We have go.Digital, go.Human, go.Tech. These are some of the approaches we're following. So go.Digital means being fully omnichannel. go.Human is that humans or customers are at the center of our attention. And then go.Tech, we want to show people that modern infrastructure, automation is very important. Automation means a lot when we can show you the fully automated eobuwie warehouse. We're aware of trends. We address those trends in our measures, and we're grouping them to inform our strategy. And we have the value of the group through our orange color. So as we treat customers and offer customers the proper products, and we want to meet customer expectations. We have to admit that in recent years, with respect to products, we were not always following customers step by step. We've made up for that recently. And you can see that on our shelves, and I think you can see that in our results as well.
Customers are the most important. They're at the very center of our attention. We already know a lot more about our customers than we did in the past. We want to know even more in order to give and deliver the best offer to our customers. So in 2020, '22, we have much wider product range and an electronic channel, we want to improve our profitability. We want to have financial stability. So by slowing down the investment process, we want to continue improving our working capital, improving our profitability. So our net debt-to-EBITDA should fall to the level we communicated to you 2 years ago. And then we have social innovation. One of the central points in our strategy. Well, employees, customers and our local environment are at the center of our attention. We're going to utilize ESG parameters. So right now it's BBB. So we've moved up from a BB. Our ambitions are much higher. We want to be seen as a group that's fully responsible, so the publication of this strategy will take place somewhere between December and January. We'll add some figures. There's a huge financial model in the background, and we'll show that. We want to make sure that our models are challenged by somebody from the outside world. And then we'll be able to show you those figures and have meetings with you on the subject. So ladies and gentlemen, since we won't see each other for the next, say, 6 months, during the conferences -- results conferences, I'd like to tell you a little bit about what's going to happen.
So we're going to install e-size scanners in CCC. So this has shown quite a bit of potential. We'll open a flagship store in the gallery, shopping gallery in the shopping mall, probably in December or January. This is the store of MODIVO, so this is the MODIVO multi-channel, omnichannel store. So it'll have all of the technical -- new technical things.
Then in [indiscernible] we'll open up a new distribution center, and this should reduce our logistics costs in eobuwie by 16%. We'll continue to optimize Vögele so this will enable us to cut costs, slash costs quite strongly. And then we'll have EBITDA profit without any IFRS things in 2020. So we think we'll be successful. We're not going to continue following this forever. I think it's worthwhile to say very clearly, this sole option we have is for Vögele to make a positive contribution to the group. It has to be positive. Are they going to be able to bring this company to -- back into the black? And if not, we don't want to have, in the long run, a company that has a negative result.
So it's taken us longer than we originally thought, and we have to admit to that mistake. The product mix for the Swiss customer, we didn't offer the best product mix to our customers there. And so we think we're going to be much more effective. We're learning day by day. So we're looking at a percentage margin per the margin in -- measured in zlotys or Swiss francs, so as much as it -- so it's a cost restructuring and so it's much more under our control. And so if we look at the 200 people in the head office, so roughly 40 will stay. And so the rest of the processes will be moved back to Polkowice. So none of the stores were profitable. We have short release tails, so there's no reason to hold on to unprofitable stores. So all of the fixed costs should be coming from Polkowice and this should enable us, make it easier for us to achieve our goals. So we're doing some remodeling and we have some conceptual changes where the product would be more reminiscent of what we have. And so in the new stores our sales performance is much better. So our costs are up, say, 2%, 3% in the new stores. So there are several positive things that are happening on the product side, the changes in the stores, reducing or cutting out the unprofitable stores.
And so in 2020, we're hopeful that Vögele will be in the black, but there's always a backup plan. And so this is the key message that Karol has conveyed to you. If we look at our e-commerce, we plan to continue developing that in Central and Eastern Europe. We want to have another 5 new markets either this year or at the beginning of next year. That's not the end. We're working on other big markets with an e-commerce offering then the publication of the strategy. This is the main method for us as a management team to communicate with you that we're performing the measures that we've written into the strategy. And we're not going to go outside of that strategy. If we want to go outside of the strategy, then we would have to tell you why we want to change something in the strategy. We want to have more understandable relations with you in terms of what we're doing and why we're doing that. And we think the strategy will inform our decisions. Then if we look at our spring and summer collection in 2020, I think we're going to have some really nice things. I'd invite you to join us in our stores. So Q1 2019, we had really -- in 2019, Q1, we had pulled the hand brake, the emergency brake. So after we started the new systems, ERP, WMS, we didn't have the ability to react to changing weather. Then in January, in February, when it was cold, we couldn't really do anything with that because of the sales slumps.
So even though we had a good base for 2018, we knew how much it could have been better had the stores been well stocked, but 4 categories weren't in the stores. So this is a huge upside we have. In the spring and summer collection for 2020, the most important thing for us is the product. And you'll see that in every subsequent collection. And so our spring and summer collection will be another manifestation of our improvements in the product field. That would be more or less it -- from a -- on top of the strategy, we won't have a lot of time to meet with you. I'll be in Prague, at the conference, at the Wood Conference but our IR will be at the Goldman Sachs Conference in London. We anticipate that we'll publish Q4 results in March. I can't really give you the date. We'll communicate that as soon as we can. That would be more or less it from our side. Our presentation was a little bit longer than usual, even though our presentations are never too short, but we have a little bit of time to respond to your questions. And so go ahead and pose any questions you might have, ladies and gentlemen.
I'm from JPMorgan. Coming back to Slide #10. If we were to add eobuwie to this slide as an additional channel, what that slide would look like?
I'm looking at the flow of clients from your base. As your customers, your regular customers, move to eobuwie, how big can that process be?
We observe that customers migrate and they're not tied to a single channel. We see a rather sizable group. I don't want to state the figures. We see very clearly a specific group of clients buying in CCC and in eobuwie. In the other groups of CCC, we see some people who could be buying from eobuwie but aren't. This is what I had in mind when I mentioned the migration of customers. So this could drive the average top line up and, so revenue as well as profit by doing that. So even though the margin is smaller as a percentage, we have an opportunity to earn more in pure zlotys. So we see that and we're calculating that. And as we have a customer view across the group, we're trying to manage that actively.
What percentage of your customers buying in CCC are no longer buying in CCC but are buying through eobuwie? How large or what percentage of customers is migrating?
Maybe somewhere between 10% and 20%. That's the percentage of the group that we're seeing in eobuwie.
What percentage of that 10%, 20% you're not seeing in the CCC mobile app or the brick-and-mortar stores? I'm talking about the cannibalization.
So when we talk about full cannibalization where we're losing the customer in CCC and only in eobuwie, I think it's very rare. I don't think that this is happening in a major scale. This would have to be a customer who has entirely moved into online, maybe there is some sort of economic change because of the attractive price proposal we give. Perhaps there are some cases of this sort, but we think that this is something that's not material. In terms of Switzerland, as I look at the split by country, Switzerland in Q3 is the only country that had a decline. And e-commerce is not a big portion of that sales.
Even though eschuhe was added, we saw that the sales dropped by half. What was the reason for that?
I think we mentioned about the product mix where we stock stores. We didn't have the right store stocking to be succinct. If we look at e-commerce, it wasn't profitable in Vögele, we were bearing an additional cost because of the way in which that client interaction took place. Even though it fell by half, it doesn't affect us economically, this is a positive impact. We're focusing on eschuhe so we want to make sure that the customers there have more. So within 48 hours, most of the consignments reach Switzerland. And since we don't have a major campaign, performance campaign there, but we're trying to move the store traffic, we want them to come to our e-commerce partnership channel. This is something that's quite positive at the end.
I wanted to ask about the EBIT loss in Switzerland in Q3. It's not -- I couldn't find that anywhere. What was the loss at the EBIT, EBITDA level in Switzerland?
The loss of Vögele. It's in the financial statements.
I didn't find it.
Okay, I'll show it to you. Let me add, if we look at the mobile app in e-commerce, Karol mentioned that a moment ago. So if we look at the customer flows, we didn't say, these questions are challenging, who's disappearing? Nobody's asking who's coming to us? Who are we attracting? As we build new sales channels, we've indicated that one of the major objectives was to lower the age of our customers. We can see that through our application and through our e-commerce activity. In that age group, 18 to 24, they're 2.5x more present in e-commerce channels than in the brick-and-mortar channel. The most important thing for the future is that the average ticket is 90% up compared to our brick-and-mortar stores. So we have totally different products. So 105 products. We have a situation quite frequently that the top 5 products are Gino Rossi -- Gino Rossi, adidas, Lasocki. Any other questions, ladies and gentlemen?
Let me add about our customer base. This is a symbol of [ sorts ]. When we talk with our CRM team about development, we're talking more about the computing capacity of our servers as opposed to new [ FTs ]. This is where we see a lot of additional savings or margins in terms of promotions, discounts, where we're going to be able to generate more in the future.
I have several questions about cost per square meter. So in Q2 we saw -- Q3, we saw them moving up. Should we anticipate further growth in subsequent quarters because of wage pressure, for example? That's my first question. The second question, September was a very good month, but weather boosted you. And so now we have October, which is quite warm. And now it has just gotten cold. And then if you look at the negative FX, was this because of IFRS in Q3? What's happening in Germany?
So we have a loss of PLN 23 million in affiliates. So I wanted to ask what's happening in Germany.
If we look at cost per square meter, they're going to be stable. This is primarily driven by FX. In subsequent quarters, like most retail players, we anticipate pressure on payroll costs, so higher costs per square meter. So if you look at minimum wage moving up by 15%, 16%, so this can affect, of course, our per square meter costs like all the others. We're going to follow the exact same paths to try to balance or offset, will either try to pass that through to the price or we'll have to do some more work on the headcount. So this will probably lead to a higher cost. A straightforward simulation shows that costs should grow by 15%. In Germany, we're rebranding the stores, so it's been completed. So we're closing some stores. This is something that should be completed by March of 2020. So this is a wholesale market, so we're developing our wholesale market and this is our area of interest. We're growing the wholesale market. And then we have a role to play in covering the cost of closing stores. So this is the area of our interest in Germany. There are quite a few questions. So you asked about the weather in September and October. I'm not sure what the impact of the weather is. Perhaps I'll disenchant some of you perhaps, so please, some of you, we're going to not talk about weather anymore.
I didn't say anything about weather being a positive or negative factor.
It is. So the weather this year is worse than last year. We can talk like weather reporters. In the previous year, it was even worse. And 2017 was worse than 2016. So if we look at the average temperature, well, we can say that October has not been a great month. That's one thing. If you look, and you've scrutinized this, we didn't do a lot of selloffs or discounts. We don't want to sell products free of charge. We've got a warmer October, but at the same time, we didn't pump our products into customers as strongly as in the past. But if we look at profitability or the gross margin, we've got some moderate reasons to be pleased. This could have been an exceptionally good month, had the first 10 days been propagated through the rest of the month. So weather changes, that's the way things are in Poland in September and October. Certainly, it was better than last year. We saw that in the gross margin in September, but we're looking at seasons now. And to a lesser extent, we're thinking about months or quarters. So weather is not something we're considering. And we can see that the new products added to the collection were received very well compared to last year, and this is one of the most important elements. So despite the morphing of our mix, product mix, so having sports shoes, we've got a lot of gross margin potential.
And what about the impact of IFRS?
I can't give you the figure from my head. It was -- there was an impact, and it was negative. Any other questions?
I have 4 questions. What are the costs of closing Germany, the cost that you still have to incur, how much that might cost? The annual cost of cycling sponsorship? Is e-commerce profitable in Switzerland? So if you're closing Sweden, what's the relative picture there? And based on what you said, gentlemen, Switzerland, if it's not profitable by the end of 2020, you'll close it. Did I understand you well? And if so, what would the cost be of closing Switzerland?
We have contractual amounts in Germany in the contract with HRG. So that's the only figure that's on the table. And so within those figures, we will continue to operate -- he's not using his microphone. There's a total cap of EUR 40 million, so that's the hard stop there. I didn't hear the question, he's not using his microphone. But there's no reason for us to drill down, we're going to stick to the contractual limit. If we look at Switzerland, we're not thinking about closing, but if we were to be unsuccessful in Switzerland of trying to having a better presence in Switzerland by adding all of the good things we have in terms of products, in logistics to a brand from Western Europe and having some of the head office values we bring to the table, I don't think we would actually close the business store by store. Even though these stores have a relatively short period of rental periods in front of them, we would probably just sell the whole thing. It depends on the conditions. But if we lose the hope to be able to run it profitably, we don't want it to take time from us, but we won't have any scruples. We have enough work to do in our business, in our core business, so we'd probably just sell it.
We're not reporting e-commerce in Switzerland, we're at the beginning of the path.
To a very small extent, are we using external advertising?
We're trying to convert store traffic into customers through our eschuhe.ch site. So we think the profitability will continue to climb compared to what we have elsewhere. Why? Because we have good clientele from Vögele and we'll be able to bring them on board directly. And then the prices are substantially higher in Switzerland compared to Germany, so we have higher margins at the beginning of the day. Logistics costs are quite comparable to what we have in Germany, provided that the volumes are in place. So these are all the things that we're taking in mind. It's a little bit more than $3 million per quarter. Any other questions?
At present, it's profitable, Switzerland? Did I understand e-commerce, Swiss e-commerce is profitable?
Yes, it's profitable. In the future, we'll see a bigger scale, bigger spend for performance. We don't see any reason for it not to be profitable. Otherwise, we wouldn't enter it. Any questions?
I have one question, follow-up question in terms of Germany. The HR Group, if we look at the consolidated loss for the first 3 quarters, PLN 20 million, some PLN 80 million at the full group level prior to the transaction. This product -- this company was profitable. So the loss that we see is caused solely by consolidation of CCC's former stores and restructuring? Or has there been a major change in that group in one or the other direction?
I'll try to respond to that question. At the EBITDA level, the HR Group has the end of the year in 30 September, it will be a positive figure. The final figures haven't been reported yet. It's below what we anticipated, but it will be in the black. So conditions in Germany weren't good for the trade sector. So this also affected the HR Group. So it's opportunity to see its results move up strongly is something that is a matter of the future. So the profitability of our business in Germany, the stores we had is lower than when we sold this to HR. So had we stayed with our stores, we would have been in a worse situation as the sole shareholder.
In that case, could we get some expectations from you concerning 2020? What sort of consolidated results might we see? Is it possible that we might be close to the breakeven point? Or will that be quite a challenge? What are your expectations?
When we talk to the management team of HR, they believe that they're going to be able to revisit the profitability levels they had prior to the deal. At this point, we don't have the final figures for the year that's coming to an end. It would be very difficult for us to say much more. I think at the next quarterly conference, we could show more detail on those figures. We'll complete the remodeling, the rebranding of these stores. We'll have closed all of the other CCC stores which should be closed, or their closure should be contracted. And what else is important, we were servicing CCC Germany. We also had some shipping problems at the beginning of the year and we won't have those problems at the beginning of next year. So we'll be able to say -- say more a little bit later. This company, in terms of what remains within the HR Group, well that should have a positive -- it should be in the black in 2020. As I mentioned, we're mostly interested in the wholesale category and of -- so the closure of stores. Any other questions?
So to recap our discussion on Germany, are you further away from exercising the call option or is the call option still in play?
We're not farther or closer. The call option is in the contract. As we've told you, as you've heard, we didn't talk about Germany in our presentation. We have things to do in other markets, in Vögele. Until we feel much more comfortable that we're going to be closer to the finish line, I can't imagine that we're going to be actively pursuing the call option for Germany. So we won't be able to depart from that discussion, but it's not something that we're considering strongly now or in the next few months.
Traditionally, a couple of questions from the Internet. It's getting a little late, but we'll also respond to those questions by some other procedure, naturally.
So question number one, by how much will headcount costs grow driven by the minimum wage hike?
Roughly 15%. We imagine that this should be in the lower tens of millions.
One more question. The cash conversion cycle, 125 days. What's your short and medium-term goal compared to the cash conversion cycle, 125 days?
Well, short and medium-term goals are the same. We will have fewer digits. We want to go below, we want to be several hundred.
Okay, that's it. Thank you very much, ladies and gentlemen, for your attention. Congratulations. I just wanted to see who's wearing Gino Rossi shoes. So [Foreign Language]. Thank you very much for your attention, and we'll invite you to join us for lunch at this time. Thank you very much.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]