This article first appeared on GuruFocus .
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Sales to End Customers:Reached 9.2 billion Polish zloty in Q2 2026, up 13.2% year-on-year.
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Like-for-Like Growth:4% in Q2 2026, improving versus the first quarter.
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Store Network:More than 13,000 stores in Poland and Romania at the end of June, with 1,368 gross openings over the last 12 months.
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Adjusted EBITDA:Exceeded 1.2 billion Polish zloty, up 16.2% year-on-year, with margin increasing to 13.3% (up 34 basis points).
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Reported EBITDA:1,163 million Polish zloty, up 16.1% year-on-year after recognizing 51 million of non-cash LTIP-related costs.
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Free Cash Flow:Over 1.2 billion Polish zloty in Q2, with conversion above 130%.
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Net Debt to Adjusted EBITDA:Decreased to 0.7 times, down 0.5 times year-on-year.
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Adjusted Net Profit:Increased to 366 million Polish zloty in Q2, up 66% year-on-year.
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Gross Margin:Up 47 basis points year-on-year.
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Franchisee Margin:Decreased year-on-year in Q2, but slightly above last year for the first half of 2026.
Release Date: July 31, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Zabka Group ( FRA:9M1 ) delivered strong Q2 2026 results with sales to end customers up 13.2% year-on-year and like-for-like growth improving to 4%.
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Adjusted EBITDA exceeded 1.2 billion Polish zloty, up 16.2% year-on-year, with the margin expanding by 34 basis points to 13.3%.
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The company generated robust free cash flow of over 1.2 billion Polish zloty, with a conversion rate above 130%.
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Zabka Group ( FRA:9M1 ) significantly strengthened its balance sheet, reducing net debt to adjusted EBITDA to 0.7 times, down from 1.2 times a year ago.
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The transformative all-cash acquisition offer from Kushtar at 32 Polish zloty per share, valuing the company at approximately $8.6 billion, is a strong recognition of the business's value and growth potential.
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The partnership with Kushtar is expected to create a leading pan-European convenience platform, providing access to enhanced scale, capabilities, and growth opportunities.
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Zabka Group ( FRA:9M1 ) continues to expand rapidly, with over 13,000 stores and a target of adding more than 1,300 new stores annually, including strong growth in Romania.
Negative Points
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The company reported a year-on-year decrease in franchisee margin for the second quarter, which could indicate potential strain in franchisee relationships.
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Zabka Group ( FRA:9M1 ) faces uncertainty regarding the outcome of the tender offer, as it is unclear whether minority shareholders will accept the 32 Polish zloty per share price.
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The acquisition by Kushtar introduces potential integration risks, including the challenge of preserving Zabka's unique culture and operational independence.
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The company's international expansion is currently concentrated in Romania, which is still in a ramp-up phase and generating losses, limiting near-term diversification benefits.
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Management declined to provide specific guidance on July trading or upgrade full-year outlook despite strong first-half performance, citing weather-related variability in like-for-like sales.
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The future capital allocation and financial leverage strategy post-acquisition remain unclear, as management stated it is too early to provide details on board changes or leverage plans.
Q & A Highlights
Q: Is the price being offered high enough for the public market shareholders of Zabka, and where will the synergies from the deal come from? A: Alex Miller, CEO of Kushtart, stated that it is up to the shareholders to decide if the price is adequate. Regarding synergies, he explained that they will come from applying Zabka's best-in-class capabilities in food, own brands, merchandise supply chain, and digital solutions across the Kushtart base, aligning with their "core plus more" strategy.
Q: With irrevocable commitments for 57% of shares, is there a threshold for the tender offer to succeed, and will you keep Zabka listed or aim for 100% ownership? A: Alex Miller, CEO of Kushtart, confirmed that the 57% irrevocable commitments provide a controlling stake. He stated that Kushtart is open to both outcomes: continuing to run Zabka as a public company on the Polish Stock Exchange or, if the tender results in a higher percentage, delisting and integrating Zabka fully into the Kushtart Group. Filip Paszke, IR Director, added that there are no other planned conditions or thresholds.
Q: Will the PLN 32 per share bid price be adjusted for the dividend that is being paid today? A: Marta Wrochna-Lastowska, Group CFO, confirmed that the dividend will be paid as planned today, and the announced share price of PLN 32 stands as is, meaning the dividend is on top of the offer price.
Q: If minority investors choose not to tender, would Kushtart consider increasing the tender offer price, or are you happy to run Zabka as a public business? A: Alex Miller, CEO of Kushtart, reiterated that the tender offer will be at PLN 32 per share and that shareholders will decide whether to tender. He confirmed Kushtart is open to continuing Zabka as a listed company but would also be open to delisting if the tender comes in over the threshold.
Q: How will the Board of Directors be changed post-acquisition, and what are your thoughts on Zabka's current capital allocation and financial leverage? A: Tomasz Blicharski, Chief Strategy and Development Officer, stated it is too early to answer questions about board composition as it depends on the final shareholding percentage. He noted that Kushtart is comfortable with the current leverage, as evidenced by their decision to proceed with the transaction.
Q: With the change in core shareholder, how does this affect the appetite for growth, specifically regarding expansion outside of Eastern Europe? A: Tomasz Blicharski, Chief Strategy and Development Officer, emphasized that both companies share similar values and a focus on growth. He confirmed that the strategy remains focused on Romania, where they just crossed 250 stores, and continuing to grow the Polish business with approximately 1,300 new stores annually. He stated it is too early to comment on future plans beyond these markets.
Q: Can you comment on the drivers of gross margin expansion and the changes in the franchisee margin, which dropped in Q2? A: Marta Wrochna-Lastowska, Group CFO, attributed gross margin expansion to improved terms of trade with suppliers, efficiencies in logistics and store costs, and lower inflation. She explained that franchisee margin fluctuations are due to seasonality and calendar effects, and the year-to-date view is more representative. For H1 2026, franchisee costs increased by approximately 10 basis points, driven by the growth of QMS (Quick Meal Solutions) and a focus on franchisee engagement.
Q: Can you provide color on July trading and whether there is room to upgrade the full-year EBITDA margin guidance given the strong H1 performance? A: Tomasz Blicharski, Chief Strategy and Development Officer, confirmed that the company maintains its full-year guidance for like-for-like sales and profitability. He declined to provide specific comments on July trading, stating that his previous comments on meeting the mid-to-high single-digit like-for-like guidance were based on what they already know.
Q: Is international expansion a story for the next two to three years, and can you provide more color on the increased incentive program costs in Q2? A: Tomasz Blicharski, Chief Strategy and Development Officer, reiterated that the full focus is on expanding in Romania as fast as possible before committing to any additional international plans. Marta Wrochna-Lastowska, Group CFO, explained that the increased LTIP costs in Q2 were due to one-off accounting reasons and are not expected to recur in the next quarters.
Q: How much of the improvement in the new growth engines segment's adjusted EBITDA loss came from Romania versus the digital offering, and what is the current loss run rate? A: Marta Wrochna-Lastowska, Group CFO, stated that investments in Romania are higher this year compared to last year due to the increased number of stores in the ramp-up period. She declined to provide specific guidance for the segment, noting that the group's guidance includes both Poland and Romania and the new growth engines.
Q: Can you provide more color on the monthly progression of like-for-like sales in Q2 and the exit rate in June? A: Tomasz Blicharski, Chief Strategy and Development Officer, attributed the variability in Q2 to different weather patterns compared to the prior year. He confirmed that the company is on track to meet the full-year guidance of mid-to-high single-digit like-for-like growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
