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CCC SA
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CCC SA
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Earnings Call Transcript

Earnings Call Transcript
2020-Q4

from 0
M
Marcin Czyczerski
executive

I'm going to have the pleasure of running this presentation with you. I'm here in the showroom. So we're looking at our new collection and how it's distributed. So this year, which has come to an end, for many years has been -- for many reasons, has been exceptional because of the pandemic, the lockdowns and the dynamics of this year. It's also been exceptional because the most recent reporting period has changed, and that's why we've been meeting with you so frequently.

On the 12th of January, I had the pleasure of presenting to you the results for Q4, which was the 3-month quarter. Now for a one-off, we're going to have the fourth quarter presented in such a way that we're going to be able to show you transparently how the company looks in terms of the traditionally captured quarter as well as with respect to the new quarter basis. So this is something that will happen only once as a result of the change or the shift in the reporting period.

So since today's presentation is more of a matter of trying to bring order to this, I'm going to try to do this as concisely as possible. In terms of our agenda for today, I would like to focus on the key events. Later, I'll talk to you about the results for Q4 and the 3-month basis, and then we'll look at the preliminary estimates for Q4 of the 4-month quarter. Then I will move on to a recap of what's happened in 2020. And then I'll make sure that you have at least a bit of some insight into what we're thinking about 2021. This is going to be a very important year for the company, and I'm convinced that it will be a very good year.

So what is the key message, in our opinion, which you should take away from today's conference in terms of what I have the pleasure of speaking to about? If we look at the year-to-year revenues on a comparable basis between 2020 and 2021, this is not something that's overly obvious. We've had a very high pace of growth in e-commerce in Q4. So e-commerce represented more than 50% of the revenue. So all of our e-commerce signs have grown very strongly, so like eobuwie, as well as this has been accompanied by Modivo, ccc.eu, DeeZee.

We also have -- we want to address the situation. Even though we've had the lockdown, the company's position has been stable in terms of its liquidity. We've got -- we're well stocked. We're well prepared in terms of preparations for spring. We'll -- renewing our brick-and-mortar sales on a key market. And so the year has gotten started for us in January. So we could see that yesterday in the open stores. So we have the pleasure of telling you a little bit about e-commerce.

Here, I would dwell for a couple of sentences on something that's of great interest view. So the search for investor and the capital group of eobuwie, and as you know, eobuwie is the company that has been growing very strongly, very robustly. So it's been developing its profitability effectively and great leaps and bounds. And so it has further opportunity for growth, more headroom both in terms of profitability and revenues. So 2021, after analyzing many options, we've made the decision to look for strategic investor, and so things are online. So we'd like to finalize that process for finding an investor in Q1. So the priority is to develop eobuwie. So for now, we're not going to say anything more. We're bound by commercial secrecy.

We're taking our greatest efforts to ensure that the situation is treated in such a way. But no news is good news. And since we're not saying anything more, that means that all of the processes are online with our original plans. From our most recent meeting, which took place on the 12th of January, we have more information about January sales. So we can take a look at what January sales brought. And one of the things that really jumps to the forefront here is the continued robust growth rate of e-commerce. And so it's very high in January, some 78%. So this is in Poland as well as in other markets, having in mind the extended or protracted lockdowns.

What I'd like to emphasize here is that the stores that are up and running, even though traffic is suppressed. So they've been able to make up for this with conversion, higher conversion. So we've seen positive like-for-like sales in January. So the conversion, as a result of having very good products, means that we've been able to excel despite the suppressed traffic footfall due to lockdowns.

So if we look at the newest collection which we've got up in the stores and we compare things year-on-year, we can see that this collection is much fresher than the one we had last year. And the result, the takeaway is that we have a higher margin in January, up by nearly 4 percentage points. And so this is information that's very good.

If we look at the 4-month quarter, you can see that we have a growth rate of 84%, and e-commerce is continuing to speed up. It's not slowing down. And so we've invested quite a bit in e-commerce. And we see that there's still a lot of potential for growth, a lot of upside.

So how are we in finishing up that 13-month atypical year? So what -- one thing that might surprise you, and I think this is a positive surprise, despite the fact that we've lost 1 -- nearly PLN 1.5 billion in revenue in the brick-and-mortar network because of lockdown and lower footfall, prior to the lockdowns, the e-commerce strength is so great, so pronounced that we've basically almost fully rebuilt our revenue position. So we have PLN 1.1 billion more revenue in e-commerce than we did last year, so that's an upswing of 71%.

So not all of this is so entirely obvious or manifest. So I can quote the Rzeczpospolita newspaper, if we look at the assessment of the strength of the Polish apparel market and footwear market, and what they've mentioned there is that it would have constricted by some 22% in 2020. But if we look at CCC, so this was around 8%. So of course, an 8% decline is not something that pleases anyone. But if you track it against the rest of the market, which was in a quite difficult position, we were operating in a pandemic environment. So we can see that we were able to continue building our position on the marketplace.

And of course, digitization, investments and decisions we had made previously to build the strength of e-commerce in terms of the digital nature of commerce, the fact that we have an omnichannel approach in our business model. But also, you see here is that there's some great growth in e-commerce, not only in eobuwie, which has grown spectacular, but we also have Modivo, which is a new brand, a new sign under which we're selling. And so of course, there was some skepticism about our group entering the apparel market. So we can see that it's grown 4x year-on-year.

So eobuwie is well-known to you. But please take a look at CCC, which in 2020 grew 7x to PLN 270 million. Because of the fast growth on the Polish market and because of opening up new markets, these results would not have been achieved. Perhaps something that's not as noticeable, but something that's quite important to the company and the management team, had we not shored up our resources for the development of our e-commerce position.

The platforms, by having new brands, and so we set up some new 20 platforms in the near -- last year. Then we had warehousing opportunities put in place in Polkowice, the ability to dispatch things from there. So we've done the first test dispatchments for a new market that CCC has, which we're going to start in March. So this would be Slovenia. So we have the omnichannel environment, which the company has done a lot in beginning in 2020, and we anticipate to seize these outcomes and benefits in 2021.

So e-commerce is one thing. The second thing is having a wonderful product, our great relations with our customers. So with respect to the stores that are up and running, not all of them are closed, we can see by how much we've improved conversion there. That's the source of our confidence that our product relations with our customers, all of these relations are improving.

And then how we're measuring, the key factor, the key indicator we track, which is NPS. Before I look in greater detail at the customer perception of CCC and what's happening in the group and how things have been improving year-on-year, month-on-month, let's step back for a moment to the strategy. We announced more or less 1 year ago, we indicated there that the key point of our strategy would be to synchronize the group and to make sure that we're going to synchronize the products, the quality, the assortment, the channels of sales, synchronization in terms of the method of communication. So we can say that what we decided then regardless of the environment or we even sped this up in the unfavorable environment. We wanted to bolster this as a -- the construction of e-commerce, which is something that's quite characteristic of CCC through our omnichannel approach. And all of this is embellished with the wonderful product. And the fundamental aspect is price attractiveness, it's affordability, the higher quality, the fact that it's in line with fashion trends. And this is something that should always be done in the sales of footwear.

Then we have very efficient processes, financial stability, the foundation for sustainable development. And this is how we've been building the group in 2020. So even though the situation was very challenging, not conducive to anyone.

So now coming back to the most important ratio or indicator we have been measuring throughout 2020. We see spectacular positive growth in terms of customer reception of the service standards we offer to our customers. So we see, as a result, a higher conversion ratio. So customers are returning to us more and more frequently.

And so we have an even better result online. What our customers have noted is the development of the product portfolio but also improvement in the quality of customer service. We've made a lot of progress here in 2020. Even so, we believe that there are many more things to do. We have some specific activities, measures to be taken. And so in line with our strategy, we want to really be aligned to our customer expectations.

So if we look at DeeZee, this tells you how closely we're paying attention to what customers have to say, the brand, the strength of the brand and the growth rate of revenue. DeeZee is something that entered the group 2, 2.5 years ago. And so its revenue has grown by some 4, 4.5x. The average growth rate is higher than 80%. And we've converted DeeZee into a profitable company that has operating profitability of some 10%. Previously, it wasn't profitable.

Two things I'd like to mention here. So even though we've seen very high growth rate in DeeZee, there's still more growth potential, more headroom to grow as opposed to construction possibilities. So we have a very strong expansion across -- of foreign markets. So in sales, sales in December abroad were up some 20% in 5 markets that we opened up. So in 2021, we plan to open more markets. And we're going to be able to increase the growth rate on the existing markets.

So part of our policy of building a strong brand is to sell apparel, which started on the 6th of December. Since that point in time, we've seen very high growth on a monthly basis, on weekly basis. In terms of the sales of the apparel department, in 2021, we believe that apparel will represent some 30% of DeeZee sales, which means that it will be an even more solidified brand. So it'll be even stronger than what you see now. So the brand strength, coupled with foreign expansion, along with an apparel section, which would give us even more fuel to drive growth. As you know, DeeZee is not the biggest project in terms of the total aspirations of the group.

A larger and even more quickly growing brand is Modivo. If we compare it to 2019, it's grown some 5x. It's present on 13 markets. So Ukraine was launched yesterday; recently, Croatia. And we're going to open up in Switzerland in the upcoming days. So we have a brand portfolio which will have grown by 1/3 with respect to last year. That means customers have more and more to choose, and so customers are coming back more and more quickly to Modivo as their favorite platform.

What's also quite important here, and this is a key project in our Go 2022 (sic) [ GO.22 ] strategy, we've assumed that Modivo would account for 15% of revenue around 2022. And so we've achieved that already, so we're going to have new ambitions for this. Now what's very important is that we have a very strong foreign footprint in Modivo due to the experience that we've been able to gain through eobuwie. So some 60% of Modivo sales are coming from foreign markets, and this is something that's swelling or growing quite quickly.

The customers at the very -- is the focal point of our attention. We've not, of course, lost sight of our strategy. And so this is becoming more and more important to our customer. And so, of course, our responsibility for sustainable development is a key message in our sales efforts.

So it's with the extraordinary pride that we can brag about that the company has moved up in the MSCI rating. We've received an A rating, which basically means that this company is one of the highest-rated companies in terms of ESG factors. We have a very high bar to meet in terms of our ESG activities. That's why we want to continue following this path because this rating reflects the fact that our company is moving in this direction, which is a direction that customers expect of us. This is very important because it shows how well we respond and reply to customer needs and expectations.

So we transparently communicate about our standards, and we show how we're working together by devising standards with our suppliers and vendors. So we have eco products, and then we have the circular economy. And so this means that we'll have lower utilization or consumption of raw materials.

And so how is this affecting the overall results of the company? The table on the right side is something that you know very well. We presented this to you at the previous meeting. What I'd like to emphasize here is that quarter-on-quarter, we've been able to grow our revenue, as you know. This quarter, what else could we say? And what else could we emphasize? Featured that more than 600 stores were closed for a very long period of time in this 3- and 4-month quarter period. This was also a pandemic year, a lockdown year.

So in each aspect, the company is taking a very conservative approach in terms of our ability to sell off stocks. And so we can say that in the second quarter of the second half of the year, we had provisions for more than PLN 600 million linked to all of the strategic factors involved with the stores not being profitable. And so we had those provisions for our stock inventories. And of course, there's some risk that could materialize. As a result, in the first half of the year, you can see that we've addressed all of the risks that are known to us. And this means that the company is in the eye of the hurricane. So 2021 would not see provisions for that.

And so to fill out the picture you see here, in the 3-, 4-month quarter, we should emphasize here that despite all of these events, the company has generated pretty good [ share ]. So in a pandemic period, this is not something that's so obvious. So inventories had grown by 16%. And we had assumed that we would be able to improve our inventory management turnover ratio. So we can see that they're not growing as fast as sales, having in mind the e-commerce.

So net debt is stable year-on-year at the end of December. We had essentially the same figure as before. So the company in December achieved additional financing with BGK guarantee, which has improved the ability of the company to obtain financing. And so this is an additional means of security for the company in terms of the upcoming year.

So CapEx in Q4 was only [ PLN 26 million ], you don't see that here, as opposed to more than PLN 100 million in the previous year. And this is part of the execution that the company has already gotten behind, gotten past the investment peak, the CapEx peak. We had spent more than PLN 1 billion in various technical capacities, and now basically, we're depreciating those investments and amortizing them. So we're going to do a lot less investment. And you'll see the positive impacts from those projects that we have implemented and rolled out in our business.

So if we look at the 4-month quarter results, once again, we can be proud of the fact that we've been able to prop up our revenue at the same level as in the previous year. This is not something that's so obvious that with more than 600 stores closed, where we don't generate any revenue at all, but they generate costs that we were able to achieve these results.

I would like for you to note, if you compare these 2 tables, the 4-month and the 3-month quarters -- fourth quarters, what maybe is not visible, we have the improvement of the gross margin. So if you look at the gross margin, it's improved in January by nearly 4 percentage points, which is linked to the sales mix as well as the share of spring collection at much substantially higher margins. So we've seen this gross margin grow by 7 percentage points.

So January has generated quite a few positive signals. So if the spring sales will be possible with open stores, we've got wonderful products on the shelves. And so if you compare this to our SG&A costs and if you compare these costs to January, you would see that we had a high level of cost discipline in January. These results do not include Vögele. This is in discontinued operations. And to get ahead of your question and having in mind in terms of the full responsibility, I think I can tell you as the CEO of the company that with respect to Vögele, you are very well aware of the story in 2019 and the first half of 2020, we spent a lot of time to restructure that business in that market. We reduced FTEs by more than 70%. If we look at the number of the stores, we reduced the number of stores, the store count, by more than 100 in terms of getting rid of the least profitable stores. So we dropped from 230 to 130. We changed the product assortment, and we turned that company into a good company. And it could be a good acquisition target for somebody that wants to develop its market in that geographic area.

Switzerland is outside of our geographic area of interest in terms of retail sales. And that's why, as a management team, we've been looking for an investor. And according to IFRS 5, we considered those operations to be part of discontinued operations. There's a lot of interest amongst big entities to scrutinize that transaction, to look at that transaction. We're following that on a timely basis, and we believe that we'll have the final solution for the Swiss market in the first half of the year.

So as we look at this table, it's clear to everyone that this is a tough quarter, a tough 4-month period. But what we're trying to draw your attention to is that January, having in mind most stores being closed, was not as bad as one could have supposed. We had good margins, good cost discipline. All of that taken together, we had some PLN 60 million losses last year -- last year, not much less. So we treat this as a pretty good achievement.

So coming on to some more pleasant topics. Looking at eobuwie. It doesn't matter if we're talking about a quarter lasting 3 months or 4 months, eobuwie has had a very fast growth in terms of revenue, in terms of profitability. What we'd like to emphasize in our conversation with you, regardless of the market that's more mature for eobuwie or markets that are just really taking their first steps, if we look at Italy, Greece, Germany, we've seen triple growth. Southern Europe is growing quite swiftly, so this shows the strength of the eobuwie, like increase. We have 30% market share. So we're the unchallenged leader there.

What's also important, eobuwie, thanks to its decisions, [ in line with ] strategy, has focused on profitable growth. So we have a very high level of profitability. So we're consistently improving our gross margins as well as our EBIT and EBITDA margins. We see further potential for our gross margin.

In terms of logistics, marketing, as you recall, 2020, the company just started its K2 warehouse operations. So in the first half of the year, this warehouse wasn't helping as much. But we can see how much it's happening -- helping us in the second half of 2020. And so it's improved our results by some 20%, so higher than the 16%. And so this will offer additional opportunities to continue driving up profitability.

So we could talk at great length about eobuwie, having in mind the extension of our marketplace presence. So we have our initial experience in terms of our efforts on the marketplace with the suppliers. And so we're going to build a technological platform to have a strong position to grow even more quickly.

Here, once again, I'd like to emphasize that on top of the e-commerce strength that you have seen in 2020, the strength of the CCC Group is linked to its product. We owe this product our rising conversion rates in stores. Our product is also responsible for improving relations and loyalty with our customers month-on-month. So we haven't stopped changing in terms of trying to evolve, to meet our customer expectations, like some of our other brands like Gino Rossi. And so we're trying to stay abreast of those customer expectations.

So having a democratic model for everybody, elegance, minimalism and offering at the best prices. We'll continue to look at the capsule lines, which have done so well in 2020; while at the same time, trying to define the identity of this brand, Jenny Fairy, which is our response to staying in line with being bold and the pastel colors for the spring period, highly accentuating the 60s and the 70s.

Then we have Lasocki, which also has its specific segment of the market, where it's starting to become more and more important in our sales. Natural leather, craftsmanship, comfort, these are all go-to-market principles. The shoes, children's shoes, which in 2019, saw some systemic change, and they were a little bit below the radar in 2020. We were filling out that offering. And then 2021 will be -- we'll see this. We'll see this as the most rapidly growing category in 2021.

The same is true of Sprandi, where we have loungewear, which is linked to a very strong emphasis in our industry. So the casualization of apparel and making products more sportive. With respect to third-party brands, we're going to have more third-party brands in our stores in 2021. And we'll have our own propriety casual sporting shoes, which is gaining a very strong identity.

What now would I like for you to remember from today's conference? Here, we're showing you only a minor section of the things and efforts we've undertaken in 2020, whether it was in the 3-quarter -- 3-month quarter or the 4-month quarter of 2020, these things will translate into more pronounced results in 2021.

The company has maintained stable sales despite the lockdown, despite the pandemic. We've seen record-breaking growth in e-commerce in terms of top line growth, and so this is very strong growth regardless of the brand we're talking about. Each one of these brands is profitable or very profitable. What's more, I'd like to reiterate this, eobuwie, Modivo, CCC are growing rapidly in the first part of the year, March and April because we are changing the systems, the location there, the warehouses in Zielona GĂłra. And we're taking -- doing our utmost to make sure that they can continue to grow, and this is something that I would encourage you to track.

What also is very important here, and you'll see that if the stores are open, you'll see a very strong collection in SS, spring and summer 2021. So we've been proud. We're proud of it in the winter period, fall period, and we're more proud when it comes to our spring and summer collection 2021.

And we have the stable financial liquidity, which gives us the ability to look conservatively. We're, of course, anticipating a variety of scenarios. So we have a real clear message for 2021 that regardless of how things develop, 2021 will be a winning year for the company.

To give you some insight into how we want to grow the group in 2021, looking at some of the various indicators and ratios, and this will be sort of a recap of the overall presentation. So you see what's happened in 2019, 2020. We've been able to increase sales per square meters, so the sales density. So 2019 was not a very good year, but it will be the base for our measurement. But as we continue to rebuild our top line, that 2021, because of the inoculations, we'll probably have some mobilization as we move towards herd immunity. We're going to be able to come back to some of that sales density figures that we saw in 2019.

And so we -- in each one of these brands, we're going to continue to improve the back-end and the front-end, having a strong product. We want to maintain higher growth rates with a high percentage of e-commerce and at the same time, building a digitized model for our stores, which would be holistic. And this is the very center of our omnichannel approach to doing business.

If you look at our gross margins in 2020, we gave more rebates, more discounts than ever in the past to fight against these closures or lockdowns to stimulate and bring in traffic footfall. And so we think that as things normalize, we'll be able to have more sales in our first prices -- or earlier prices, as has been the case in January. And we think this is something that will accompany us in upcoming months.

Then we have all that technology that stands behind our relations with customers. We're going to be able to understand customers better, grasp their needs and not only through discounts. So we've started working on our [ 2-0 ] approach. And this is going to be an important event, which should give the company a boost in terms of its EBIT margin.

So as we eliminate Germany and Switzerland and set up the provisions on unprofitable stores, discontinuing sponsoring contracts for cycling and other types of sponsoring. So we'll discard some of these cost generating programs, and this should give us more income and should considerably improve our EBIT margin.

We want to follow this path step by step. So regardless of what's going to happen in 2021 because of the pandemic, our message is clear. We want to be the winner of this period. Thanks to the decisions we've made in the past, thanks to the fact that we're a flexible, agile organization that has its compass clearly pointing to customer needs.

So now let's move on to the Q&A session. And I hope this presentation has given you a big information input, having in mind also the items I mentioned about Vögele or eobuwie. We are bound by commercial secrets. We've conveyed to you all of the information that we could give to you. Everything is moving in line with our schedules.

M
Marcin Czyczerski
executive

[Operator Instructions] So we've got a lot of questions. So I won't read questions aloud that talk about sourcing and investor for eobuwie or that talk about KVAG. What level of EBITDA is planned for eobuwie in 2021, 2022?

We said at the results conference that we held on the 9th of September, if my memory serves me well, and you look at the data we provided then, that's the data we can mention responsibly in terms of our ambitions and our expectations. We said that up until 2023, the revenue of the company, of the group will triple. In 2021, the EBITDA should be PLN 230 million, PLN 250 million. Considering the ambitions, the targets, we hadn't assumed any additional lockdowns. As I mentioned to you, we see a lot of positive effects coming from the work we've done.

With respect to Modivo profitability, the ability to augment and enhance our logistics operations. So we think that we're going to be able to positive you -- surprise you positively. But these targets are still upheld.

Can you say what is the value of inventories and liabilities that you have at the end of 2020? And what's the comparison? What's the net debt to EBITDA, giving consideration to IFRS 16?

If we look at these 2 issues, we'll present them in the full-fledged financial report -- financial statements, which we'll publish on the 18th of May, if I remember correctly. We can't reflect on that in terms of the results at the end of 2020 versus 2019 because balance sheet valuations, as you know, they need a little bit more time to do. So it's a little premature to put forward any type of preliminary results, which talk about the P&L statement.

And if we look at like-for-like in stores that were open, it's negative 16%. Could you give a comment on that? I understand these are stores that didn't have a lockdown, so outside of the shopping galleries.

As you know, I communicated this, even if stores were open in 2020, they had traffic on -- in episodes, that was better than normal. So basically, minus 20%. Well, this was something that was positive versus the non-lockdown months as opposed to minus 50%. So if we assume that we had minus tens and tens of percentage, these like-for-like sales results for the whole group was -- were only 16% for stores that were open. So you can see that the company has good performance in terms of conversion or the average value. This is a mix of all of the markets.

We observed Polish stores which were amongst the stores that had higher like-for-like results year-on-year. If we look at the information, looking at retail sales for Gino Rossi, you can assume that this brand is almost nonexistent. So has Gino Rossi stores been closed and eobuwie has been moved into CCC? Is this how it should be seen?

It would be hard for me to draw that conclusion based on what data -- set of data you're looking at. The way we look at this is totally different. I don't remember, frankly, at this time, what was the sales of Gino Rossi in millions of pairs of shoes prior to the merger. We had more than 1 million pairs as opposed to, I think, around 500,000 prior to the margin. So we had margins moving up by some 100%. So in terms of the gross margin, gross profit achieved on a pair of shoes of Gino Rossi, we're very happy with the results.

Despite the decline in revenues, despite the lack of decline in revenues, why is the EBITDA fallen so much?

To respond to this question, the main issue is that if you look at it as follows. You have the cost of a single segment in the pre-COVID segment, while 70% of the costs are fixed costs of the retail business, 30% of the cost of e-commerce, and you have a situation in which stores are closed. We have a lockdown. E-commerce is growing with 100% of the variable costs, and so then the costs follow the growing e-commerce. So the cost of retail fall, but they're still on a base. But the fall and single secret of why EBIT and EBITDA is not following top line, basically it's because of the mix, the channel mix. Because one channel is up. It doesn't have any revenue, but it has costs; whereas the other one is growing, the costs are growing, and the revenue is growing.

If we look at discontinued operations in Q3, we had PLN 18 million plus. What is the Q4 result? Or was this just a pure accounting result?

In terms of Switzerland, we're going to have to be -- we'll have to just stick with the set of figures I gave you about Switzerland. Switzerland, we had the lockdowns, were lower. That's one thing. In Q4, what we've emphasized very strongly is that we've lowered the cost base in Switzerland. So it's generating lower losses.

As we also pointed out, we have a reasonable level of sales losses, and we incorporated that in the valuation, which we put into the provisions, and that was something that we put together in the first quarter of 2020. So we can say that's something that's something that's fully provisioned. We're not adding any capital to Vögele, so it's utilizing its own resources to run its business.

So in Q4, have you shown any funding sources from the shields, government shields or other aid programs?

So the aid programs across Europe, not only in Poland, are substantially lower in the subsequent waves of the pandemic. And we saw during the first lockdown, all of the aids, the biggest amount of aid is in Austria and Czech Republic and Slovakia, so roughly PLN 10 million. In Poland, it hasn't been incorporated yet up until recently. It was around EUR 800,000. So basically, the EU had fixed the figure of, I think, EUR 1.8 million because the company meets the criteria for being included in that target group cohort because of the decline in revenue in November.

What is the tax -- commercial tax you anticipate to pay in 2021?

It depends on revenue, but assuming that we have a normalization of revenue, I would say, around PLN 4 million.

What's the cost of store operations in 2021 per square meter? What was the level of government support?

I think we already discussed that, basically, just the first portion of the question. As we said, the company has generated a very good level of operating costs per square meter in 2019 after changing the number of FTEs per square meter, after completing some new processes, rolling out new process and completing those projects. So in 2021 -- in 2021, if we have the aid coming from lower rental contracts, we don't want to declare any amounts, but I think you could assume safely that around [ PLN 120 million ]. But let's assume that if it improves, this would be a positive surprise.

So as we gradually move to the end, the last few questions. What's the bank debt the company has? How do you intend to look at April and the suspension of covenants?

So I mentioned during the presentation, based on the data we published, the net debt is around PLN 983 million. So it's stable year-on-year at the end of January. At the end of the previous January, it's stable year-on-year. We're -- we have much more stock for the spring period and for the beginning of the summer. So we believe the situation is quite stable in terms of refinancing itself. That's how I understand the second part of the question.

Let me remind you that we have a plan with banks concerning the refinancing. We're in the midst of talks about the term sheet for refinancing. We're starting our dialogue with bondholders, which the bonds would mature at the end of June. Our intention would be to synchronize these 2 streams.

Here, we've got a very healthy business, which in 2021 despite the lockdown, more lockdowns, we've been able to improve that, and we've been able to cut away Germany and Switzerland as unprofitable assets, sponsoring contracts, unprofitable stores. We closed 100 stores according to expectations. And so if you look at e-commerce and the new network of CCC, we have our new ideas. And this will be, we think, enjoying a positive reception amongst the investors and others, banks as well.

What's the level of rent that the company will begin with 2021? Is it more or less the same as in 2020? If it's lower, by how much?

We strive not to provide this data because we are working on a partnership basis with the landlords, and we also protect the commercial secrets. The rents will be substantially lower. So on a per square meter basis, we can assume that they should be down by 10-or-more percent, depending on the facility.

So what's going to happen here in 2021? So we're in the process of optimizing our network, the CCC network by utilizing space more sagaciously, and we're utilizing big spaces differently. We have a specific idea about how to use them and how to use the smaller and medium-sized spaces. And they're becoming an important part of our omnichannel world. We're digitalizing these stores.

And so in March or April, let's say, April, these stores and their offers will become part of the e-commerce offering. So treating them additionally as logistics hubs, so this would be a source of an additional offer for customers, same-day delivery or deliveries within 90 minutes. And this is quite popular in Warsaw. And so we are able to guarantee deliveries within [ 90 ] minutes. So these stores will take on a different [ rules ] or different [ view ].

So the final number of stores, the final amount of space is something we're agreeing upon with the customer. So it's depending on how trends change, how customer behavioral trends changes. This will tell us more about the average size of stores. And the stores will take on a new character from the one they've seen in the past and things you could have seen with CCC.

I think that was the last question in the Q&A panel. So as the Investor Relations team, we're at your disposal the whole time. And so you can write to us at ir@ccc.eu. So if you have any follow-up questions, we'd be more than happy to field them.

I'd like to thank you for your attention today. So thank you for attending today's conference. So this sums up the most difficult year in the history of the company. Once again, I would reiterate, yesterday, we started the new year 2021 formally. We started well. I'm convinced that this will be a very important year for the company. You'll see a lot of new elements [ are extremely ] working smoothly and efficiently. And so in 2020, at the end, despite the pandemic and the lockdown, a lot of positive things was happening. And we're convinced that we're going to be able to report a lot more positive things once this year normalizes versus 2020. So once again, I'd like to thank you for your attention.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]