Pepco Group (PCO) Q4 2025 TU earnings summary

Executive summary

• 2025 was a transformational year, marked by the sale of Poundland, exit from FMCG, and a sharpened focus on core categories and regions, resulting in improved profitability and cash generation.

• Positive like-for-like growth was achieved in all key regions in H2, with Poland and CEE turning around and Western Europe delivering strong performance and profitability.

• Store expansion continued, with 218 new stores opened year-to-date and a target of 248 by year-end, including entry into new markets such as North Macedonia and Kosovo.

• Digital initiatives advanced, including a successful coupon-at-till pilot and a mobile app launch planned for early 2026.

• Results tracked in line with or ahead of CMD guidance, with gross margin and EBITDA margin outperformance.

Financial highlights

• Group revenue grew 8.8% for the first 51 weeks of FY25, with like-for-like revenue up 2.7% and Q4 LFL growth accelerating to 3.9%.

• FY24 revenue reached €4,160m, up 15.7% year-over-year, and FY25 revenues (excluding Poundland) are expected to exceed €4.5bn.

• Gross margin improved to 47.6% in 9M FY25 from 46.5% in FY24, outperforming guidance.

• Underlying EBITDA (pre-IFRS 16) was €398m for 9M FY25 and €483m for FY24, with EBITDA CAGR of 28% from 2022-2024.

• Free cash flow (unlevered) was €271m for FY24 and €167m for 9M FY25, supporting shareholder returns.

Outlook and guidance

• On track to deliver FY25 underlying EBITDA at the top end of the high single-digit guided range.

• 248 net new stores planned for FY25, with continued expansion in existing and new markets.

• Medium-term ambitions include revenue growth of at least 7% CAGR, EBITDA growth of at least 9% CAGR, gross margin around 48%, and unlevered FCF over €200m annually.

• Full year underlying net earnings growth is expected to significantly exceed EBITDA growth due to lower interest and tax charges.