Zabka Group (ZAB) Q3 2025 earnings summary

Executive summary

• Sales to end customers reached PLN 8.5 billion in Q3 2025, up 14% year-over-year, with like-for-like growth of 4.5% in the quarter and 5.5% year-to-date, despite adverse weather conditions impacting results.

• Store network expanded to 12,099 locations across Poland and Romania, with 1,296 openings in the last 12 months and rapid growth in Romania, maintaining leadership in the convenience segment.

• Adjusted EBITDA grew 14% to PLN 1.3 billion in Q3 2025, and adjusted net profit surged 48% year-over-year to PLN 505 million, driven by operational performance and lower financial costs.

• Net financial debt to adjusted EBITDA improved to 1x, enabling readiness for dividend payments and reflecting robust cash generation and disciplined capex.

• Revenue for the first nine months of 2025 grew 14.1% year-over-year to PLN 20,230 million, with net profit up 40.5% to PLN 530 million and adjusted net profit up 54.6% to PLN 649 million.

Financial highlights

• Gross profit was PLN 1.5 billion in Q3 2025, up 13% year-over-year, and for the first nine months rose 15.2% to PLN 3,655 million.

• Adjusted EBITDA margin expanded by 9 basis points in Q3 and by 26 basis points for the nine-month period, reaching 12.6% for 9M 2025.

• Free cash flow exceeded PLN 600 million in Q3 and reached PLN 1,804 million for 9M 2025, slightly below last year due to a one-off sale and leaseback in Q3 2024.

• Effective tax rate improved from 27% in Q3 2024 to 22% in Q3 2025.

• Reported EBITDA reached PLN 1.23 billion in Q3, up 12.2% year-over-year, impacted by PLN 51 million in LTIP and IPO-related expenses.

Outlook and guidance

• Store network target increased to 16,000 by end of 2028, with annual rollout of 1,300+ stores in Poland and Romania.

• Like-for-like sales expected to remain in mid-single digits for 2025, with mid to high single-digit trajectory over the medium term.

• Adjusted EBITDA margin for 2025 anticipated at the upper end of 12%-13%.

• Adjusted net profit margin on track for 3% in 2025, with a medium-term target of 4.5%.

• Dividend payout policy formalized at 50%-70% of consolidated net profit annually, with flexibility for incremental or reduced payouts.