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The largest organized convenience retailer in Poland.

Investor: Mid Europa Partners

Industry: Food retail

Year of investment: 2011

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Company

Largest organized convenience retailer in Poland operating a network of 4.5k stores under Zabka (convenience) and Freshmarket (proximity supermarket) banners. Stores are located predominantly in medium and large cities, either in traffic intense locations or residential areas.

Growth

  • Number of Stores: 4.5k at exit vs. 2.3k at entry
  • Sales: PLN 6.3bn vs. PLN 2.2bn at entry
  • EBITDA: c.4x vs. entry

Żabka wykres ENG

Main objectives of the funding

  • Roll-out acceleration
  • Consolidation of fragmented, ‘mom-and-pop’ convenience market in Poland
  • In-housing of logistics and optimization of distribution processes
  • Investment into new product categories (Zabka Café, read meals, on-the-go snacks) and convenient services (pick-up points, utilities payments, cash withdrawals, introduction of various payment methods)

Achievements of the company

  • Undisputed #1 player in the organized food convenience segment in Poland serving 700m transactions annually with 8m customers visiting a store at least once a month
  • Acceleration of organic expansion pace from 200-250 openings p.a. prior to Mid Europa entry to 500-600 new locations p.a. during Mid Europa investment (2 per day on average; a roll-out pace unparalleled in Europe). Presence in all cities with >10k inhabitants in prime high traffic locations in city centre and residential areas
  • Introduction of numerous commercial initiatives, including refreshing of logo and store lay-out, optimization of product assortment and pricing
  • Doubled the size of the network, tripled the top-line and quadrupled EBITDA over Mid Europa’s investment horizon 

c.4x
EBITDA growth

from
2.3k to 4.5k

increase
in number of stores
(2011-2016) 

 

Value added by PE/VC fund

  • Roll-out acceleration: calibration of roll-out model translated into significant acceleration of organic expansion pace
  • Network repositioning: executed complex strategy aimed at changing customer perception (quality, pricing, assortment range)
  • Brought logistics in-house and optimized distribution process (fourth distribution centre opened in 2015)
  • Strengthened the management team: created management functions (CFO, COO, CMO) and added A-level executive to the Supervisory Board
  • Improvement of internal and external financial reporting systems over Mid Europa investment horizon
  • Consolidation play: formed, and then supported, an internal M&A team. Zabka completed 8 acquisitions of strong regional players, enhancing operations by over 200 stores