Smyk wants to increase its market share in Poland and Romania, does not rule out acquisitions

"We see enormous potential in the Romanian market for our market share to reach the same level as in Poland in the long term, and in Poland we also aspire to further increase our market share," Smyk's CEO told the video conference on Thursday.

"(...) Both markets are characterised by a large unconsolidated market share, which we see as an opportunity,"

At the end of June 2025, the Smyk group's sales network comprised 253 own stores in Poland and 35 in Romania.

According to a report prepared by the strategic consulting firm OC&C, in 2024, the group had a 14.3 percent share of the main target market in Poland, which includes children's fashion, toys and games, and equipment and accessories for children. Its competitors include listed e-commerce platform Allegro, listed retailer Pepco and part of listed fashion group LPP, Sinsay. In Romania, the group's share last year was 3.9 percent.

"Poland and Romania are the largest markets and are actually growing the fastest in the entire region. This is where we see our opportunity. Although there is pressure on the number of children being born, we also see that at the same time, spending per child is increasing," CEO Grom pointed out.

"We also know that in Western Europe, spending per child is even higher, and this is one of the factors that makes us look confidently to the future. The OC&C report shows that the market will grow, despite the [demographic] pressure," he added.

Smyk's CEO added that this applies to both the Polish and Romanian markets, as well as new markets.

When asked whether the group's business model is resilient to demographic trends, he replied: "I believe it is resilient, as our figures show. There are fewer children, yet we are still managing to grow our business in Poland."

"What's more, we are developing it more and more effectively thanks to the fact that we have achieved economies of scale and have modern logistics and tools to better understand customer needs. In terms of market share, a large part of the market is still unconsolidated, and we see a great opportunity there, especially through openings in new regions, in retail parks," CEO Grom assessed.

Secondly, as he pointed out, disposable income is growing in Poland, and the society is becoming wealthier, partly thanks to the social benefits programmes such as 800+, which are operated by government not only in Poland but also in other markets.

The CEO noted that these state-subsidised family support schemes further increase the amount of money that appears in the market's children goods segment.

As Michal Grom pointed out, there is also a growing trend of so-called 'kidults', i.e. adults interested in products associated with childhood, such as building blocks. In September this year, the company launched the Nowear brand (clothing for older teenagers and young adults).

"It's our start-up. We are testing various solutions. We are showing that we can move beyond the 'All4Kids' area. (...) We can see how the share of 16+ or 18+ products in our turnover is growing, depending on the range," Smyk's CEO told the conference.

In August 2025, as part of its international expansion, the group opened its first stationary shop in Slovakia, and in 2026, it also plans to open its own stores in the Czech Republic and Bulgaria.

In 2025-2026, Smyk plans to open a total of over 35 new stores in Poland, Romania, the Czech Republic, Slovakia and Bulgaria.

"By the end of next year, we want to have eight stores in these three new markets, and we want to continue this growth," said the CEO.

Grom announced that the group is analysing merger and acquisition opportunities in the CEE region in order to strengthen its market position.

"We are looking at the entire CEE region. We are identifying places where we could accelerate our growth through acquisitions. However, we are not considering this as our main business case at this point," he said.

The CEO admitted that although the group receives a lot of offers, it thinks about M&A "opportunistically".

"We will consider elements that will allow us to accelerate our international growth, because this is a big and important milestone in our growth strategy today, and secondly, to expand our product range and customer base or address the sale of new products," Grom said.

"We would like to be in a position where we see that we are well established in new markets and already have an omnichannel presence. So, we have a lot to do over the next 12-18 months. (...) If we see that there is potential and the price is attractive, and the entity fits in with our further development, we will definitely consider such an acquisition," he added.

Smyk expects, both in the short and medium term, an increase in the number of the group's stores by approximately 15-20 per year, an increase in sales revenue of a few percent both the short- and medium term.

The company plans to maintain its adjusted EBITDA margin (excluding one-off items) in the short and medium term at a level similar to that recorded in recent years. The assumed capital expenditure reflecting the group's further investments in new stores and the maintenance of existing stores is approximately PLN 60 million (EUR 14.2 mln) per year in the short term and over PLN 60 million per year in the medium term.

In 2024, revenues from customer contracts achieved by the Smyk group reached approximately PLN 2.25 billion (EUR 531.2 mln), a year-on-year increase of around 6 percent. Last year's operating profit amounted to approximately PLN 118.9 million (EUR 28.1 mln), up 91 percent year on year, while adjusted EBITDA (excluding one-off items) reached approximately PLN 301.7 million (EUR 71.2 mln), up 18 percent year on year.

In the first half of 2025, revenues from contracts with Smyk group customers amounted to approximately PLN 985.1 million (EUR 232.6 mln), up 0.5 percent year on year. The group's operating profit reached around PLN 15 million (EUR 3.54 mln) against a loss of approximately PLN 12.3 million (EUR 2.9 mln) in the prior year period. Smyk's adjusted EBITDA stood at approximately PLN 105.3 million (EUR 24.9 mln), up 26.9 percent year on year.

The management board intends to recommend the payment of dividends to shareholders, starting from the distribution of profit for 2026 (paid in 2027) to the tune of 30-50 percent of net profit. The level of the recommended dividend payment may be increased in years in which the group achieves "exceptionally good financial results".

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The public offering of Smyk Holding comprises no more than 13,636,364 newly issued shares and no more than 18,410,214 existing shares sold by AMC V Gandalf SA. The maximum price of the offered shares has been set at PLN 13 (EUR 3.07) per share.

It is expected that individual investors will be allocated between 10 and 15 percent of the final number of shares offered.

Individual investors may subscribe for Smyk shares on October 23-29, 2025. During this time, the process of demand book-building among institutional investors will also be ongoing.

As announced, the final number and final price of shares offered to individual categories of investors will be determined after the completion of the book-building process among institutional investors and are expected to be published around October 30, 2025. The first day of trading of Smyk shares on the Warsaw Stock Exchange will be around November 7, 2025.

As announced, the intention of the company and the selling shareholder is to determine the final number and price of the shares offered in such a way that the company's gross proceeds from the issue of new shares amount to approximately PLN 150 million (EUR 35.4 mln).

Smyk wants the total number of shares offered and purchased in the offering to represent approximately 45 percent of the share capital after the registration of the new shares and after the issue of series E shares under the incentive programme established in the company.

After the offer, the selling shareholder will remain the majority shareholder of Smyk, and CEO Michal Grom plans to uphold (indirectly) his controlling stake in the company for the foreseeable future.

The lock-up period for Smyk and the selling shareholder is 360 days from the date of the first listing of the shares on the Warsaw Stock Exchange.

The proceeds from the issue of new shares are to be used to strengthen the financial position through partial repayment of bank debt and to finance the group's further development strategy.

Smyk's management board anticipates that the partial repayment of bank debt will reduce the net debt/adjusted EBITDA ratio (excluding one-off items) to 1.6x and contribute to a reduction in the group's financial costs.

pel/ ao/