Żabka Group raises expansion targets and unveils dividend policy
Robust growth, supported by strong margins and the attractiveness of its business model is driving exceptional cash generation, enabling accelerated debt reduction and the launch of profit distribution
The Group has updated its strategy to reflect accelerated network development and a clear commitment to profit distribution. Zabka now expects to open more than 1,300 new stores annually between 2025 and 2028, compared with its earlier guidance of 1,300 in 2025 and 1,000 in subsequent years. By the end of 2028, Żabka aims to operate roughly 16,000 outlets, about 1,500 more than forecast at the time of its IPO last year. This momentum is fueled by the strong performance of newly opened stores and a secured pipeline of high-quality sites in Poland and Romania. The Group also reiterate its IPO guidance, including the ambition to more than double end-customer sales between 2023 and 2028, reinforcing its leadership in the modern convenience segment.
Supported by exceptional cash generation and a swift reduction in leverage, the Group expects to reduce its net debt to adjusted EBITDA post-rent ratio to fall to around to 1.0 times in the near term, in line with previous guidance. Other key IPO financial targets, including mid- to high-single-digit like-for-like (LfL) growth, an EBITDA margin at the upper end of the targeted 12–13% range, and an improvement in adjusted net profit margin to 4.5% in the midterm, were maintained.
Under the Capital Allocation Policy approved today, the Board of Directors intends to recommend distributing 50% of 2025 net profit in the form of dividends, and 50–70% of net profit in subsequent years, subject to market conditions and planned investments. In the longer term, the Group may also launch share buyback programmes.
Tomasz Suchański, CEO of Żabka Group, commented:
Żabka Group, as set out at its 2024 Warsaw Stock Exchange debut, is pursuing a rapid expansion strategy underpinned by solid finances and improving margins. We now expect to operate around 16,000 stores across Poland and Romania by end‑2028—approximately 1,500 more than indicated at listing. At the same time, we have revised our growth potential (the so-called whitespace), which currently amounts to around 27,000 locations across Poland and Romania. The newly approved Capital Allocation Policy is designed to strike a balance between reinvesting in growth and delivering regular profit-sharing through dividends. Payout levels will be adjusted in line with market conditions and the Group’s investment priorities. Over the longer term, Żabka may also consider share buybacks, always with a focus on creating long-term value and ensuring stable returns for investors.
Tomasz Blicharski, Group Chief Strategy & Development Officer, added:
Żabka Group is entering a new phase of its growth trajectory, pairing rapid expansion in Poland and Romania with a focus on shareholder returns through dividend payout. The strategy rests on sustained organic growth, driven by network enlargement, resilient like-for-like performance and the scaling of its digital ecosystem. By reinforcing its competitive edge, innovating across its product portfolio and maintaining disciplined capital allocation, the group aims to more than double end-customer sales between 2023 and 2028. The ambition underscores Żabka’s determination to cement its leadership in the modern convenience segment.
Marta Wrochna-Łastowska, CFO of Żabka Group, said:
Żabka Group continues to deliver robust growth and strong cash generation. As a result, since our stock market debut, we have been able to significantly reduce our leverage, reaching our target net debt to EBITDA post-rent ratio of c. 1.0x faster than initially anticipated. At the same time, we have successfully optimized our sources of financing, decreasing our effective cost of capital. Consequently, we are pleased to announce the introduction of a new capital allocation policy, which includes dividend payout. With this step, Żabka Group joins the ranks of an elite group of blue chip companies that combine dynamic growth with a commitment to sharing profits with shareholders.
Key highlights of the Żabka Group’s new Capital Allocation Policy
- The Group plans to accelerate expansion, targeting more than 1,300 new store openings each year from 2025 to 2028, compared with the previous goal of over 1,300 openings in 2025 and over 1,000 annually in 2026–2028. By the end of 2028, the network is expected to reach around 16,000 locations in Poland and Romania, roughly 1,500 more than projected at the time of the IPO. The faster rollout reflects solid sales performance at new stores, rising demand for modern convenience formats, and availability of attractive locations in both markets.
- At the end of June 2025, the Żabka Group network – Europe’s largest convenience chain – comprised 11,793 outlets in Poland and Romania, an increase of 10.8% from 10,640 a year earlier. Updated expansion plans put the potential of the combined Polish and Romanian markets at nearly 27,000 stores, meaning the Group could ultimately double the size of its network in the long term.
- While mergers and acquisitions may be considered to support core business development, the Group’s focus remains on organic growth.
- In the near term, the Group aims to reduce its net debt to consolidated adjusted EBITDA post-rent ratio to 1.0x. At the end of the first half of 2025, the ratio stood at 1.2x (down from 2.1x at the end of 2023). Medium- and long-term plans include maintaining moderate leverage and an adequate liquidity buffer to preserve operational flexibility.
- Provided leverage remains around 1.0x and liquidity stays at a safe level, the Board of Directors intends to recommend distributing dividend equal to 50% of consolidated net profit for the prior year starting with results for 2025. In subsequent years, the dividend may range from 50% to 70%, depending on market conditions and investment plans.
- The Board of Directors may recommend a higher payout if the Group reports one-off earnings, or a lower or no dividend if significant investments, including mergers and acquisitions, are planned for a financial year.
- Under Luxembourg law, the dividend amount recommended by the Board of Directors may not exceed the Company’s net profit for the previous financial year plus distributable reserves and retained earnings, after deducting past losses and mandatory reserve allocations.
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