The largest organized convenience retailer in Poland.
Investor: Mid Europa Partners
Industry: Food retail
Year of investment: 2011
Year of exit: 2017
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
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