Action

Investment Thesis

• Grow store network within existing countries
• Expand into other European countries
• Strengthen supply chain
• Opportunity for operational enhancements

Investment Overview

Action is a European discount retailer operating in the Netherlands, Belgium, Germany, France, Luxembourg, Austria, Poland, Czech Republic, Italy, Spain, Slovakia, Portugal, Romania and Switzerland. Action sells more than 6,000 products across 14 retail categories (cleaning products, toiletries, office supplies, toys, garden utensils, homeware, etc.).

The Manager believes Action represents an attractive opportunity to invest in one of the fastest-growing European discount retailers with sustainable competitive advantages due to scale and surprise element for customers resulting from changing inventory (~2/3 of product range is variable with 150 new products every week). Over time, Action has been able to maintain compelling like-for-like growth rates and to ensure that all its mature stores are profitable. In terms of new stores, Action has consistently beat its guidance for new store openings per year and exhibits highly attractive store economics with average payback period <1 year. The Manager views Action as a potentially countercyclical asset as the company targets all people regardless of their income level, and generally offers the lowest prices across all the product categories.