REG - 3i Group PLC - FY2026 Q3 performance update
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RNS Number : 8107Q 3i Group PLC 29 January 2026
29 January 2026
3i Group plc
FY2026 Q3 performance update
Another period of good performance
· Increase in NAV per share to 3,017 pence at 31 December 2025 (30
September 2025: 2,857 pence). Total return of 20% for the nine months to 31
December 2025, after a positive foreign exchange translation impact of £766
million, or 78 pence.
· In the 52 weeks to 28 December 2025, Action generated net sales
and operating EBITDA(1) of €16,000 million and €2,367 million
respectively, 16% and 14% ahead of 2024. Operating EBITDA was €2,393 million
after adding back a one-off expense of €26 million relating to a one-off
payment to staff following Action's 3,000th store opening.
· Action added a record 384 net new stores in the year (13% store
growth for the year). New store performance continues to exceed expectations.
· Action's like-for-like ("LFL") sales growth was 4.9% in the year
(2024: 10.3%), a strong result albeit impacted by a cautious consumer in
France. The new year has started well, with Action's LFL sales growth at 6.1%
for P1, the first four weeks of January 2026.
· In France, October 2025 and November 2025 LFL sales decreased by
mid-single digit percentages but recovered to a flat performance in December
2025 with good seasonal sales, and to 2.1% LFL growth for P1, the first four
weeks of January 2026.
· Following Action's capital restructuring and pro-rata redemption
of shares in October 2025, 3i received £944 million of gross proceeds, of
which £755 million was redeployed to acquire a further 2.2% stake in Action,
taking our total stake to 62.3% at 31 December 2025.
· 3i received a dividend from Action of £246 million in December
2025. After this distribution, Action ended 2025 with a cash balance of €807
million.
· Across the remaining portfolio, we continued to see good
contributions from some of our consumer and private label portfolio companies,
including Royal Sanders and Audley Travel.
· In the quarter, we completed the disposal of MAIT, returning
proceeds of £147 million, representing a 34% uplift on its 31 March 2025
valuation, a 2.8x money multiple and a 28% IRR.
· 3i Infrastructure plc's ("3iN) underlying portfolio continues to
trade well. 3iN saw a 3% increase in share price in the quarter, closing at
374 pence at the end of December 2025. 3i recorded a dividend of £18 million
from 3iN in the period.
· 3i Group has a strong balance sheet, with gross cash of £995
million and gearing of 1% at 31 December 2025.
1 Provisional, subject to audit
Simon Borrows, Chief Executive, commented:
"In 2025, Action continued its impressive growth trajectory. It opened a
record number of new stores, entered two new countries and delivered
double-digit annual sales and earnings growth. This was a strong result and
Action continued to trade well, even in markets with a cautious consumer
backdrop.
In the first nine months of FY2026, 3i generated £1.8 billion of realised
proceeds and dividends from its portfolio, while investing £1.6 billion. We
also delivered strong growth from a number of our other leading consumer and
private label portfolio companies, including Royal Sanders and Audley Travel.
We have made a good start to the final quarter of our financial year to 31
March 2026 and are set for another strong year of compounding growth."
Private Equity
Long-term hold portfolio companies
Action
In the 52 weeks to 28 December 2025, Action generated net sales of €16,000
million (2024: €13,781 million) and provisional operating EBITDA, subject to
audit, of €2,367 million (2024: €2,076 million), which were 16% and 14%
respectively ahead of 2024. LFL sales growth was 4.9% (2024: 10.3%). The
operating EBITDA margin for the year was 14.8%. After adding back the one-off
payment of €26 million made to staff during the year to celebrate Action's
3,000th store, the EBITDA margin was 15.0%.
Action's LFL sales growth of 4.9% in 2025 should be seen in the context of 56%
compound growth in LFL sales over the previous four years. The LFL sales
growth during the year was overwhelmingly driven by growth in the volume of
transactions. Action's LFL performance ex-France for 2025 was 7.2%, with
France delivering 1.3% LFL growth.
Trading across the majority of Action's markets was strong in 2025, including
in the Netherlands, which delivered a LFL performance above Action's average,
and in Poland and Austria, which delivered close to double digit LFL sales
growth. Action's Southern European markets were even stronger, reflecting
continuing excellent consumer engagement and being earlier in their growth
trajectory. Germany's LFL sales growth was over 4%.
France was the outlier, mainly reflecting significant consumer caution, but
was also affected by the early-year impact of the ERP migration and increasing
levels of promotion activity from a range of retail concepts. The French LFL
stores generated 2.5% growth in the volume of transactions over the year,
underlining the popularity of Action's stores in the French market. Action
won numerous awards in 2025, including "Retailer of the Year" in the
Netherlands and, for the third consecutive year, "Enseigne préférée des
Français" (favourite brand among French consumers), having first launched in
France only 13 years ago.
These were good results for the year to 28 December 2025, despite a softer
final quarter. In its final quarter (P10-P12) of 2025, Action generated net
sales of €4,771 million (Q4 2024: €4,215 million) and operating EBITDA of
€805 million (Q4 2024: €732 million), 30% and 34% of the overall 2025 net
sales and operating EBITDA result. In Action's Q4 FY2025, October 2025 and
November 2025 represented the toughest trading months, in part due to warmer
weather and a later start to seasonal sales. The LFL sales performance in
December 2025 was close to the group average for the year, with good seasonal
sell through and inventory levels as expected.
Action's 2026 has started well, with LFL sales growth at 6.1% for the first
four weeks of 2026 (P1) despite disruptions to customer flows from heavy snow
in parts of Europe in the second week of January 2026. Specifically in France,
October 2025 and November 2025 LFL sales decreased by mid-single digit
percentages but recovered to a flat performance in December 2025 with good
seasonal sales, and to 2.1% LFL growth in P1, the first four weeks of January
2026.
Action added a record 384 net new stores in 2025 (2024: 352), taking its
footprint to 3,302 stores across 14 countries. Trading across Action's most
recent expansion markets of Switzerland and Romania has significantly exceeded
expectations. All stores are profitable, with the in-growth stores (those not
yet in the LFL cohorts as they have been open for fewer than 52 weeks)
outperforming our expectations.
In October 2025, Action successfully completed two financing transactions. The
first raised €1.6 billion of total
incremental term loan debt. Subsequently, Action completed a capital
restructuring with a pro-rata redemption of
shares, returning £944 million of gross proceeds to 3i, £755 million of
which were redeployed to acquire a
further 2.2% stake in Action. As a result of this transaction, we increased
our ownership position in Action to
62.3%. The second financing transaction repriced €3.1 billion of Action's
existing term loan debt, extending the
maturity of a portion of the debt and generating an annual interest cost
saving of €14 million.
In December 2025, following strong cash generation, Action paid an interim
dividend, of which 3i received £246 million. After the two financing
transactions and the payment of the dividend, Action ended P12 2025 with cash
of €807 million and a net debt to run-rate EBITDA ratio of 2.8x (September
2025: 2.4x).
Action financial metrics
Last 12 months to P12 2025 Last 12 months to P12 2024
(28 December 2025) (29 December 2024)
Financial metrics €m €m
Net sales 16,000 13,781
LFL sales growth 4.9% 10.3%
Operating EBITDA 2,367 2,076
Operating EBITDA margin 14.8% 15.1%
Operating EBITDA normalised for a one-off expense(1) 2,393 n/a
Normalised operating EBITDA margin 15.0% n/a
Run-rate EBITDA 2,628 2,251
Net new stores added 384 352
1 Normalised for a one-off expense of €26 million in 2025, related
principally to a payment to eligible Action employees in June 2025 to mark
Action's 3,000th store opening.
At 31 December 2025, Action was valued using an LTM run-rate EBITDA to
28 December 2025 of €2,628 million, which included the usual adjustment to
reflect stores opened in the last 12 months and was normalised for a one-off
expense of €26 million, related principally to a payment to eligible Action
employees in June 2025 to mark Action's 3,000th store opening.
The multiple of 18.5x, net of the liquidity discount, remained unchanged,
resulting in a valuation of £22,382 million for 3i's 62.3% equity stake (30
September 2025: £21,464 million for a 60.1% stake).
In January 2026, 3i entered into an agreement with GIC to purchase a further
limited partnership interest representing c.2.9% of Action equity in exchange
for the issue of 31,353,859 new ordinary shares of 73 19/22 pence in 3i Group
PLC (the "Transaction").The Transaction is expected to complete on 30th
January 2026 simultaneously with the relevant new ordinary shares being
admitted to trading on the main market for listed securities of the London
Stock Exchange. The Transaction shares are subject to lock up arrangements for
up to 12 months, subject to customary terms. The equivalent consideration
value is £1 billion. The result of the Transaction will take our total
ordinary shares in issue to 1,025 million, or 1,019 million on a diluted
basis. Our equity ownership in Action will increase to 65.3%.
Further details of Action's 2025 performance and 2026 guidance will be
provided during the Action Capital Markets
Seminar in March 2026.
Royal Sanders
Royal Sanders continues to generate strong performance, underpinned by volume
growth and good trading from its prior bolt-on acquisitions. In December 2025,
we completed a £56 million further investment in Royal Sanders and the
business also completed the bolt-on acquisition of Vendoleo.
Other PE portfolio performance
Across the remaining portfolio, Audley Travel saw sustained strong
year-on-year departure performance across the group. Luqom maintained its top
line growth and profitability momentum in the period, despite a largely
subdued wider online lighting market. Across our healthcare portfolio, we saw
a mix of stability and accelerating growth as last years' sector headwinds
have largely subsided. SaniSure's performance has been largely solid in the
context of the recovering bioprocessing consumables market, supported by the
uptake of new platform products, including its mixing and filling solutions.
Similarly, Cirtec is supporting customers through the launch of several new
commercial programmes while managing transition challenges across several
existing programmes.
The majority of our services and software and industrials portfolio saw stable
performance in the quarter.
Wilson, operating in the recruitment market, continues to experience
challenging trading conditions.
The ratio of net debt to EBITDA across the Private Equity portfolio increased
from 2.6x at 30 September 2025 to 3.0x at 31 December 2025. The average
Private Equity portfolio leverage excluding Action was 3.6x (30 September
2025: 3.5x).
No changes were made to any of our portfolio company valuation multiples in
the period. The overall averages of our quoted comparable multiples across the
portfolio were stable over the period.
Private Equity investment
Portfolio company Type Business description Date £m
Action Reinvestment General merchandise discount retailer Oct 2025 755
Royal Sanders Further Private label and contract manufacturing producer of personal care Dec 2025 56
ten23 health Further Biologics focused CDMO Various 10
Other Various n/a Various 4
Total Q3 investment 825
Total investment in H1 FY2026 732
Total investment as at 31 December 2025 1,557
In the period we completed £825 million of investment, of which £811 million
related to our long-term hold investments in Action and Royal Sanders. In
addition to Royal Sanders' acquisition of Vendoleo, Evernex also completed the
self-funded acquisition of Sunrise Technologies, a provider of data centre
maintenance services in Morocco.
Private Equity realisations
Portfolio company Type Date £m
Action Refinancing Oct 2025 944
MAIT Full Realisation Nov 2025 147
Yanga Refinancing Dec 2025 20
Other Other Various 1
Total Q3 realised proceeds 1,112
Total realised proceeds in H1 FY2026 391
Total realised proceeds as at 31 December 2025 1,503
In the period we completed £1,112 million of realisations, of which £944
million related to Action. The remaining £168 million of proceeds related
primarily to the sale of MAIT which returned £147 million of realised
proceeds. This realisation represents a 34% uplift on MAIT's 31 March 2025
valuation, a 2.8x money multiple and a 28% IRR. We also received a £20
million distribution from Yanga, following a successful refinancing.
Infrastructure
3i Infrastructure plc's ("3iN") share price increased by 3% in the three
months to 31 December 2025, closing at 374 pence at the end of the quarter (30
September 2025: 361 pence), valuing 3i's 29% stake at £1,006 million (30
September 2025: £972 million). We also recognised dividend income of £18
million from 3iN in the quarter. The remaining infrastructure portfolio
companies are generally performing as expected.
Top 10 investments by value(1,2) at 31 December 2025
Valuation Valuation
Activity in the quarter
Valuation Valuation Sep-25 Dec-25
basis currency £m £m
Action Earnings EUR 21,464 22,382 Received proceeds of £944 million, of which £755 million was redeployed to
acquire a further 2.2% stake.
Dividend of £246 million received in December.
Royal Sanders Earnings EUR 968 1,130 Vendoleo acquired in December 2025.
£56m further investment in the quarter.
3i Infrastructure plc Quoted GBP 972 1,006 £18 million dividend recognised
Cirtec Medical Earnings USD 587 584
Scandlines DCF EUR 571 572 £12 million dividend received
AES Earnings GBP 430 422 £6 million dividend received
Audley Travel Earnings GBP 356 380
Tato Earnings GBP 387 373 £10 million dividend received
SaniSure Earnings USD 308 310
European Bakery Group Earnings EUR 296 296
1. The valuations are translated at the spot rate at the balance sheet date.
Sterling strengthened by 0.1% against the euro and was flat against the US
dollar in the quarter to 31 December 2025. Individual valuations exclude the
benefit of the foreign exchange hedges.
2. One portfolio company has been excluded due to commercial sensitivity.
The 10 investments in the table above comprised 91% (30 September 2025: 90%)
of the total investment portfolio value of £30,309 million (30 September
2025: £29,299 million).
Total return and NAV position
The impact of foreign exchange in the third quarter of our financial year was
minimal. In the nine months to 31 December 2025, we recorded a total foreign
exchange transaction gain of £766 million, including the impact of foreign
exchange hedging, as sterling weakened by 4% against the euro, partially
offset by a 4% strengthening against the US dollar.
Based on the net assets at 31 December 2025 and including the impact of
hedging, a 1% movement in the euro and US dollar would result in a net total
return movement of £228 million and £12 million respectively. The diluted
NAV per share increased to 3,017 pence (30 September 2025: 2,857 pence) or
2,980.5 pence after deducting the 36.5 pence per share (£357 million) first
FY2026 dividend, which was paid on 9 January 2026.
Balance sheet
At 31 December 2025, cash was £995 million (30 September 2025: £439
million) and, including our undrawn £1,200 million Revolving Credit Facility
("RCF"), liquidity was £2,195 million (30 September 2025: £1,200 million and
£1,639 million respectively). Net debt was £216 million, and gearing was 1%
(30 September 2025: £772 million and 3%).
Audit tender result
Following the conclusion of a competitive audit tender process led by the
Audit and Compliance Committee, the Board has approved the proposed
appointment of Ernst & Young LLP as its external auditor to take effect
from, and including, the financial year ending 31 March 2028, subject to
shareholder approval at the 2027 Annual General Meeting. The comprehensive
audit tender process followed the Financial Reporting Council Minimum
Standard. KPMG LLP will continue in the role of the Group's auditor for the
financial years up to 31 March 2027, subject to shareholder approval.
- ENDS -
Notes
1. Balance sheet values are stated net of foreign exchange translation. Where
applicable, the GBP equivalents at 31 December 2025 in this update have been
calculated at a currency exchange rate of €1.1464: £1 and $1.3452: £1
respectively.
2. At 31 December 2025 3i had 988 million diluted shares.
3. Action was valued using a post-discount run-rate EBITDA multiple of 18.5x
based on its LTM run-rate earnings to 28 December 2025 of €2,628 million.
4. As at 31 December 2025, the notional amount of the forward foreign exchange
contracts held by the Group was €3.0 billion (including €600 million
associated with Scandlines) and $1.2 billion.
For further information, please contact:
Silvia Santoro
Group Investor Relations Director
Telephone: 020 7975 3258
Kathryn van der Kroft
Communications Director
Telephone: 020 7975 3021
About 3i Group
3i is a leading international investment manager focused on mid-market Private
Equity and Infrastructure. Our core investment markets are Europe and North
America. For further information, please visit: www.3i.com
(http://www.3i.com/) .
All statements in this performance update relate to the nine-month period
ended 31 December 2025 unless otherwise stated. The financial information is
unaudited and is presented on 3i's non-GAAP Investment basis in order to
provide users with the most appropriate description of the drivers of 3i's
performance. Net asset value ("NAV") and total return are the same on the
Investment basis and on an IFRS basis. Details of the differences between 3i's
consolidated financial statements prepared on an IFRS basis and under the
Investment basis are provided in the Annual report and accounts. There have
been no material changes to the financial position of 3i from the end of this
quarter to the date of this announcement.
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