Dino Polska Q1 2025 presentation: store expansion accelerates amid slowing LFL sales

Introduction & Market Context

Dino Polska SA (WSE:WA:DNP) presented its first quarter 2025 financial results on May 15, 2025, revealing a mixed performance characterized by accelerated store expansion but significantly slower like-for-like (LFL) sales growth. The Polish grocery retailer continues to execute its organic growth strategy in a market environment where food inflation has substantially moderated to 4.9% in Q1 2025, down from 17% two years earlier.

The company maintained stable profitability despite the challenging sales environment, with EBITDA growing 8.2% year-over-year while the EBITDA margin contracted slightly by 0.1 percentage points to 7.24%.

Quarterly Performance Highlights

Dino Polska reported sales of PLN 7,354 million in Q1 2025, representing a 10.2% increase compared to PLN 6,671 million in the same period last year. However, this growth rate marks a significant deceleration from the 20.3% year-over-year growth recorded in Q1 2024.

The most notable slowdown was in LFL sales, which grew by just 0.5% year-over-year, compared to 11.9% in Q1 2024. This dramatic deceleration reflects the normalization of food inflation in Poland and potentially increased competition in the grocery retail sector.

As shown in the following chart comparing LFL sales growth and food inflation trends:

Despite the slowdown in comparable store sales, Dino’s EBITDA increased by 8.2% year-over-year to PLN 532.3 million, outpacing the 7.4% EBITDA growth seen in Q1 2024. The EBITDA margin contracted slightly by 0.1 percentage points to 7.24%, a smaller decline than the 0.9 percentage point contraction experienced in the same period last year.

The following chart illustrates Dino’s EBITDA performance:

Store Expansion Strategy

Dino significantly accelerated its store expansion efforts in Q1 2025, opening 58 new locations compared to 32 in Q1 2024. This expansion increased the company’s total store count to 2,746, up from 2,156 at the end of Q1 2024. The company’s net sales area grew by 12.9% year-over-year to 1,085,000 square meters.

The following visualization shows Dino’s network expansion trajectory and regional distribution across Poland:

The company’s geographic coverage continues to strengthen, with an average of 7.3 stores per 100,000 inhabitants across Poland as of March 31, 2025, compared to 6.5 stores per 100,000 inhabitants a year earlier. Regional coverage varies significantly, with the highest concentration in western Poland and opportunities for further expansion in other regions.

Dino’s strategic focus on organic store roll-out remains central to its growth plans through 2030, as illustrated in the company’s strategy update:

Financial Performance Analysis

Dino’s revenue growth has remained robust despite the challenging market conditions. The company reported quarterly revenue of PLN 7,354 million in Q1 2025, representing a 10.2% increase year-over-year.

The following chart shows Dino’s quarterly and annual revenue growth trajectory:

The company’s sales mix in Q1 2025 consisted of 42.0% fresh food, 45.8% other food products, and 12.2% non-food items, reflecting Dino’s continued focus on grocery retail.

Dino has maintained a strong balance sheet, with the net debt to EBITDA ratio decreasing to 0.31x in Q1 2025 from 0.76x in 2022. The interest coverage ratio improved to 16.3x in Q1 2025 from 10.9x in 2022, indicating enhanced financial stability despite significant ongoing investments.

Capital expenditures reached PLN 516 million in Q1 2025, representing 97% of EBITDA, highlighting the company’s continued reinvestment in growth initiatives.

Sustainability Initiatives

Dino has made significant progress in its renewable energy investments, with 2,569 of its stores now equipped with photovoltaic installations, including 93 new installations added in Q1 2025. The total capacity of these solar panels reached 103 MW, representing a 17% increase year-over-year.

The company generated 15.2 GWh of electricity from solar energy in Q1 2025, up from 10.4 GWh in Q1 2024. This renewable energy production resulted in approximately 9,100 tons of CO2 emissions reduction during the quarter.

The following image illustrates Dino’s renewable energy investments:

Forward-Looking Statements

Dino Polska remains committed to its organic expansion strategy, with plans to continue opening new stores across Poland through 2030. The company aims to maintain profitability while investing in growth, despite the challenging environment of slowing LFL sales growth.

The company’s key achievements in Q1 2025 demonstrate its balanced approach to growth and operational efficiency:

While Dino faces headwinds from moderating food inflation and potentially increased competition, its strong balance sheet, continued store expansion, and investments in sustainability position the company to navigate these challenges. The significant deceleration in LFL sales growth will be a key metric to watch in future quarters as the company works to balance new store openings with comparable store performance.

Full presentation:

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