3i Group (LON:III) executives and Action’s management team used a capital markets seminar to outline Action’s 2025 results, discuss the discount retailer’s operating model, and detail expansion plans across Europe and into the United States.
2025 performance: sales, EBITDA, and store growth
Action CEO Hajir Hajji said 2025 was “a great expansion year,” with net sales up 16% to €16 billion, supported by ongoing store openings and like-for-like sales growth of 4.9%. She noted the result came on top of “56% compounded like-for-like growth” delivered between 2021 and 2024. The company reported operating EBITDA up 14% to €2.367 billion.
Action also entered two new markets in 2025—Switzerland and Romania—ending the year with eight stores in Switzerland and six in Romania, Hajji said. Action CFO Joost Sliepenbeek later updated that the company had nine stores in Switzerland and 11 in Romania at the time of the seminar.
France: softer like-for-like and intensified competition
Management highlighted France as the main drag on 2025 like-for-like performance. Hajji said like-for-like growth in France was 1.3% for the year, while excluding France, Action’s like-for-like growth was 7.2%. She attributed the slowdown to weaker consumer sentiment and more cautious spending, noting that French like-for-like stores still grew 2.5% in transactions, but customers spent less per visit.
Competition in France was described as intense, with supermarkets increasing promotions and price competition, particularly in FMCG. Hajji said Action implemented further price reductions in Q4 to reinforce its low-price position, and that into 2026 it would continue lowering prices “where needed” while focusing more on lowest-price items. In Q&A, she said Action lowered around 450 prices at the end of 2025 and continued price reductions in early 2026.
Margin and cash flow: drivers and headwinds
Sliepenbeek reported 2025 EBITDA margin of 14.8%, down 30 basis points from 2024. He attributed the outcome to lower than expected like-for-like sales growth, higher supply chain costs as a percentage of sales, and higher “margin adjustments.” He said Action’s gross margin increased 40 basis points to 40.8%, driven mostly by a higher share of direct sourcing, but that increases in margin adjustments—including duties and charges and higher stock losses—offset the gross margin uplift, leaving gross margin after adjustments “more or less flat.”
Supply chain costs rose to 5.3% of sales from 5.0%, with Sliepenbeek pointing to higher handling and inventory costs tied to direct sourcing, including an increase in the period product was held in inventory. He said some of those higher costs carried into 2026. Action also incurred a one-off employee payment tied to the 3,000th store milestone, totaling about €26 million.
On cash generation, Sliepenbeek said cash conversion was 83% in 2025 and operating cash flow was 12.3% of net sales. Action’s 2025 capital expenditures were €379 million (2.4% of sales), including €36 million for three new distribution centers.
Expansion outlook: Europe growth and new markets
Action reiterated its European growth runway, projecting total “white space” potential of around 4,000 to 4,650 stores across its current in-scope countries. For 2026, management said it plans to add at least 400 stores, with the most openings expected in Italy, Germany, Poland, Spain, and France. Action plans to enter Croatia and Slovenia in 2026, and said Bulgaria is the next intended market entry in 2027.
The company said it plans to open distribution centers in Italy, France, and Spain in 2026, citing the ability to reach new catchment areas such as Sicily. Management said it had already opened two stores in Croatia in March and planned its first Slovenia store opening for September.
U.S. decision: timeline, footprint, and investment
A central strategic update was Action’s decision to prepare for entry into the United States, alongside continued European expansion. Hajji said Action aims to open its first U.S. store by end-2027 or early 2028, starting with around 20 stores across North Carolina, South Carolina, and Georgia, with an ambition of about 100 stores by end-2030.
Management estimated total U.S. investment over 2026–2030 of €350 million to €400 million, covering stores, inventory, organization build-out, and supply chain development. Sliepenbeek characterized this as a gross figure that includes inventory (but not accounts payable) and cautioned that profitability would likely come later than in European market entries due to higher initial country-office costs and the plan to establish a local U.S. buying team.
In written Q&A, the company said its current assumption is that roughly 40% of the U.S. assortment will be similar to Europe and 60% different. Hajji also said Action expects to invest more in marketing initially in the U.S. than in European markets, but anticipates marketing spend could normalize over time if customer response mirrors Europe.
3i CEO Simon Borrows emphasized that Action has built scale across Europe, including in markets he described as challenging for other retailers, and said the company has “a good level of confidence” the format can work in the U.S. He added that 3i remains focused on Action’s long-term compounding growth rather than short-term like-for-like volatility.
About 3i Group (LON:III)
3i is an investment company specialising in Private Equity and Infrastructure. We invest in mid-market companies headquartered in Europe and North America.
We generate attractive returns for our shareholders and co-investors by investing in private equity and infrastructure assets.
As proprietary capital investors we have a long-term, responsible approach.
We aim to compound value through thoughtful origination, disciplined investment and active management of our assets, driving sustainable growth in our investment companies.
