Answear.com with sales growth of more than 39% y-o-y. and more than PLN 20 million EBITDA in H1 2022.
Answear.com, a leading e-commerce player offering fashion and home décor products in the CEE region, summarizes the first half of 2022. The company generated revenues of nearly PLN 376 million, an increase of 39% year-on-year. Despite the challenging market environment, Answear.com's profitability is also solid, with adjusted EBITDA of nearly PLN 24 million, an increase of about 16% year-on-year.
We are pleased with the results achieved in the first half of 2022. On the one hand, we have maintained dynamic growth, and on the other hand, we have significantly improved profitability compared to the last quarter and last year. This shows that despite the difficult market environment, our business is doing well and is able to improve results. This is, of course, thanks to our constantly enriched product offer, strong market position, as well as strong geographic diversification and appropriate outreach to our customers – comments Krzysztof Bajołek, CEO of Answear.com.
Results in Q2 2022 alone were not burdened by any one-off events and costs, as was the situation in Q1 2022, and sales were dominated by the new spring-summer'22 collection, which had a significant impact on improving the Company's profitability. In addition, EBITDA was positively impacted by the improvement of key business KPIs and the dilution of fixed costs, which is a direct result of the dynamic growth in sales.
Answear.com is growing rapidly in foreign markets. In H1 2022, sales in EU markets outside Poland increased y-o-y. by more than 56%. During this period, the Company launched sales in a new country – Slovenia. The situation in the Ukrainian market also improved. Revenues in this market fell by only 4.4% y-o-y. despite the lack of ongoing sales for more than 2 months in the first half of this year.
The situation on the Ukrainian market is returning to normal. The level of sales in the first half of this year is close to that of a year ago, where no one had yet heard of the war. It is worth mentioning that we started regular sales only in May this year. This allows us to look optimistically into the future and count on the recovery of this market – adds Krzysztof Bajołek.
It is worth noting that in the second quarter of this year. The company has increased growth opportunities through bank financing. mBank extended and increased its line for financing current operations from PLN 44 million to PLN 80 million. In addition, Answear.com increased its credit limit at PKO BP from PLN 33 million to PLN 53 million, and concluded reverse factoring agreements with PKO BP Factoring for PLN 15 million and, in recent days, with Santander Factoring for up to PLN 10 million.
In our industry, efficient management of cash flow and working capital is key. In addition, we are a growth company with a defined vision and development strategy. Of course, such an activity requires adequate financing. I'm glad that we were able to negotiate an increase in the Company's limits and creditworthiness. This confirms that banks have a good perception of our business and the development strategy we have chosen – adds Jacek Dziaduś, CFO of Answear.com.
In April this year. Answear.com also extended the lease agreement for its central warehouse in Kokotow near Krakow. Under the new agreement, the lease term has been extended by 8 years from the original agreement. This means that the lease agreement will run until July 13, 2037.
The central warehouse is the heart of our business. The extension of the lease agreement is a very important step for us in developing an efficient and cost-optimized operating model for the Company. Thanks to our efficiency, we are able to offer the fastest shipping in the CEE region. In addition, we assume further expansion abroad in the coming years, which will naturally involve looking for a location for one more warehouse that can efficiently serve southern markets – concludes Krzysztof Bajołek.