Day and thank you for standing by. At this time, all participants are in a listen-only mode. Welcome to the 3i Group plc Results Presentation Webcast for the year to 31st March 2026. After the presentation, there will be a question- and- answer session via the conference call, and instructions will follow at that time. Participants can also submit questions through the webcast page using the Ask a Question button. Please be advised that today's conference is being recorded. I will now hand the conference to the CEO of 3i Group plc, Simon Borrows, to open the presentation. Please go ahead. Good morning. Welcome to 3i's FY 2026 annual results presentation. I'm Simon Borrows, CEO of 3i Group. On the call with me today are James Hatchley, our Group Finance Director, and Silvia Santoro, our Group Investor Relations Director. The slides supporting our remarks have been put on our website this morning. In spite of the challenging market backdrop, we delivered another good result with a return on equity of 22%. Once again, we significantly exceeded our return target of 15%. Our NAV per share finished at GBP 30.30. Private equity produced a 23% gross investment return and also generated cash of some GBP 1.8 billion. We ended the year at 2% gearing, and we announced a dividend for the year of GBP 0.845 per share. That's a 15% increase on last year and represented an aggregate of some GBP 5.4 billion of dividends since our restructuring in 2012. You will also have seen that this morning we launched a GBP 750 million share buyback program, and James will cover that shortly. The 23% gross investment return for private equity includes a 25% gross investment return for Action, and that's in spite of a more difficult trading backdrop in France from September of last year. The overall return for the non-Action PE portfolio improved this year to 14%, supported by good earnings growth. In fact, 96% of the portfolio by value grew their earnings in the year. We bought a further 7.5% of Action for GBP 2.6 billion. Some GBP 800 million of that was cash, with the balance being 3i share consideration. We received portfolio cash proceeds from realizations and refinancings of some GBP 1.5 billion, and we got over GBP 280 million of dividend income. As we move into the new financial year, the PE portfolio is positioned defensively and has decent earnings momentum. This slide shows the spread of earnings across the portfolio. We continue to see a good performance from the majority of our investments, which you can see clearly on our value movement slide. This slide shows that our largest value increases were overwhelmingly supported by solid performance. We again had few detractors this year. Cirtec Medical performed well, its earnings were held back by the transition of one of its neuromodulation devices. Action delivered another very good performance in 2025. Net sales were up 16%, and it had over 380 new store openings, as well as 4.9% like-for-like growth on top of 10.3% in 2024. Action also successfully entered two new markets, Switzerland and Romania. Its operating cash flow grew to almost EUR 2 billion, with cash conversion at 83% of operating EBITDA. As a result, Action once again made significant cash distributions, part of which we reinvested to increase our stake last October. While the financial results were strong again for Action, the broad consumer feedback was even stronger. Action gained an increasing share of customer visits, which averaged 21.6 million per week in 2025 across all its markets, old and new. I'd like to zero in on the French consumer in particular. We used this slide at the Capital Markets Day in March to show Action's extraordinary growth in France since it opened its first store there in 2012. EY-Parthenon's annual Enseignes Préférées des Français is an annual study of French consumers' attachment and loyalty to new retail brands, and it's been great to see that Action was ranked favorite retailer amongst French consumers for a 4th consecutive year. Past winners are a who's who of the strongest French retailers. This recognition, maybe more than anything, demonstrates the established and enduring appeal of Action in France. As with last autumn, we see a weaker consumer in France and also lower traffic in Germany since the deterioration in the Middle East situation at the end of March. Year-to-date like-for-likes at the end of last week were 2.4% against the 6.8% comparable for last year. Trading has remained good in Holland and Belgium and Southern Europe. FMCG categories are trading well and benefiting from price reductions made in February and at the start of this month. On like-for-likes, Action is about 1.5% behind where we thought it would be at this stage of the year. That was mainly as a result of lower seasonal sales due to cooler weather over recent weeks compared to last year. Given the strength of last year's like-for-likes in the first half and in Q2 in particular, we continue to anticipate a stronger second half benefiting from easier comps. This slide is perhaps helpful in illustrating what I mean. How you do on like for likes in any given week is a function of how well you did in that week the previous year. Last year, I signaled that Action was now too big to continue to grow at double-digit like for likes overall. I suggested that mid-single digits performance was the more likely run rate as we have seen for some time in the Netherlands. Like for likes this year would be much easier if we were competing against the general market as opposed to competing against Action vintage 2025. Within our budget, we have allowed for the challenging comparables in the first half. As you can see, Q2 is our toughest comp period for the year. It's clear that the hurdles in Q3 and Q4, which are also by far our biggest quarters for sales and profits, get easier. It's also sensible to look at like-for-like over a two-year time horizon because a two-year view helps deal with the variances of both public holidays such as Easter and weather. Rather than say, 4%-5% over one year, it's probably better to look at 8%-10% over two years. As you can see, the two-year stack for Q1 is well within the range anticipated. Before moving on, I'd like to reiterate that while like-for-like is an important KPI, Action sales growth remains driven predominantly by its international store rollout. The entry into Croatia this year has gone very well, and the team is now preparing for entry into Slovenia in the autumn. The broader store opening program is moving forward as we expected, with 69 stores opened up to this week, and we remain on track to achieve our store opening target for the year, which will deliver close to 13% store growth year-on-year. Strong cash generation is also key element of our investment case for Action. Now that Action's cash balance is reaching EUR 1 billion, the board has approved another dividend to be paid this month, and 3i will receive some GBP 255 million. As you know, Action was active in the debt markets in 2025, achieving good extensions to two existing debt issues, as well as a total interest cost saving of over EUR 33 million. It also secured a total of EUR 1.6 billion of further debt issuance. We used our share of the cash from Action's October share redemption exercise to purchase further equity interest in Action. We couldn't use all of our proceeds to buy more Action equity because a number of LPs were also buyers in October. We also bought further interest in September and January in exchange for newly issued 3i shares. Royal Sanders had another busy year in FY 2026, generating excellent sales and profit growth and acquiring Vendoleo. We took the opportunity to invest further capital in Royal Sanders, and our holding is now over 90%. The portfolio, apart from Action and Royal Sanders, is broadly balanced across our investment sectors, consumer, healthcare, industrials, and services and software. Within that, we have a very small exposure to software. The PE portfolio, apart from Action and Royal Sanders, delivered a good performance. The consumer sector produced some very good growth with only a slight drag from some smaller discretionary businesses. Healthcare is now well-poised for a good step-up in returns as orders and sales grow across all the companies in that sector. AES and Tato both traded well relative to their sectors, and we saw decent trading across services and software portfolio. We had two strong realizations in the year with good money multiples and IRR returns, as well as strong premia over their book values. The infrastructure team delivered another very solid year with GBP 104 million of cash income to the group. 3iN continued to perform well and benefited from an outstanding return on the announced sale of TCR. TCR is the largest independent lessor of airport ground support equipment, and the exit produced a 50% uplift on realization, as well as a 3.6x money multiple and a gross IRR of 20%. Thank you. I'll now pass over to James for his section. Thank you, Simon, and good morning, everyone. Our total return on equity for the financial year was 22%. That's another good year of compounding. You can see the detail here. The increase in NAV was principally driven by value growth of GBP 4.09 per share. Foreign exchange movements were in our favor this year and added GBP 0.77. Portfolio income and fees contributed to the net increase of GBP 0.74. The dividend payments in the year reduced NAV by GBP 0.79. We closed the year with an NAV per share of GBP 30.30, up 19% from last year. You can see the components of the GBP 4.09 per share here. It's important to note that it really wasn't a straightforward year in terms of the geopolitical and economic environment. That said, the portfolio did well and generated GBP 4.2 billion of value growth. As Simon said, Action continued to deliver with an increase in value of GBP 3.5 billion. The PE performance increases were GBP 628 million. That increase largely reflects the value growth in our other long-term hold asset, Royal Sanders, and in Audley and Luqom. The decreases in the year are principally related to Cirtec and Wilson. Over the year, we made a number of changes in multiples, nearly all of which were down, which I will cover later. The net effect was a reduction of GBP 40 million. The increase in the quoted investment portfolio of GBP 75 million came from the performance of 3i and Basic-Fit. The portfolio ended the period with a value of GBP 31.8 billion. Embedded in our value growth is the consistent application of our valuation processes with our cross-cycle approach continuing to serve us well. That means we come into periods of volatility with decent buffers compared to peer sets. Let's start with Action. We continue to value Action on a post-discount multiple of 18.5x its LTM run rate EBITDA of EUR 2.65 billion. At 31st March, that gave us an enterprise value for Action of EUR 49.1 billion. The valuation of our 65.4% holding was GBP 23.7 billion. During the year, we acquired, either for cash or for 3i equity, an additional 7.5% of Action's equity. All of these equity transactions took place at our reported valuation, i.e. our 18.5x. At the same time as our count cash transaction, other LPs bought and sold equity stakes in Action at the same valuation as our trades. If we look back a year to March 2025, when Action was valued at an EV of EUR 43.1 billion, and compare that EV to the outturn for the run rate EBITDA this March, you arrive at a forward-looking multiple of 16.2x. 18.5x LTM run rate EBITDA and 16.2x as a forward-looking proxy are the two benchmarks we've consistently used when comparing Action to our usual peer set. These two charts cover the core peer set over the year from March 2025 to March 2026. As usual, there are some fluctuations in the latest quarterly marks of some of the peers. This is nothing new. On an LTM run rate basis, Action's valuation multiple continues to sit well within the pack. It is above the overall average, but nearer the lower rated of the four better rated peers. On a forward-looking basis, Action also sits in a similar position, above the average, but nearer the lower rated of the four better rated peers. We always reference Action and its KPI relative to the peer group. At the CMD, we showed the charts on the top half of this slide. Store growth, like-for-like sales growth, net sales, and operating EBITDA growth on both a five-year view and over the last 12 months. Here, at the top of the slide, we repeat just the LTM charts for Action and its peers. As you can see, Action outperforms the peer group average on all measures, which is consistent with where it stands in terms of valuation. I also wanted to show some additional metrics which we think are important because they further demonstrate the power of the Action model. These are shown on the bottom half of the slide. Sales and profit densities, cash conversion, and a two-year stack for like-for-like sales growth. Action also outperforms the peer group average on all of these measures. Our valuation is also supported by a DCF analysis based on cautious assumptions of Action's long-term growth trajectory. I wanted to look at a longer time series as we've done before, because it's important in our valuation process that we have due regard to cross-cycle or longer-term valuation benchmarks. This slide shows Action's peer group LTM EBITDA average multiples over five years. This five-year timeframe includes some significant periods of external uncertainty and volatility. COVID, Russia's invasion of Ukraine, the change in the inflation and interest rate environment, significant shifts in U.S. tariff policy, and now a new Middle Eastern situation. By putting a greater weight on averages over a longer time series and not focusing on individual peers in individual moments, there's a lot less noise in this presentation of the comp set. We've also highlighted the average of the better-rated peers and the average of the best-rated peers, Costco and Dollarama. We like this approach as a way to judge the market's consistent view of fair value for the different companies in this sector. Each quarter, the board's valuation committee at 3i, and of course our auditors, also do their own independent work on our valuations. Let's now have a look at how the rest of the portfolio and its valuation multiples compare to the peer sets. This chart shows the valuation multiples for our PE assets in dark blue and the average of the multiples from the relevant valuation peer sets in light blue. With the underperformance of the market running into year-end, we have seven out of 24 companies with a valuation multiple above the average of the peer group. For 3 of those seven, the difference is very small. Importantly, all the assets across the portfolio remain within their respective peer group ranges. One multiple moved up and six multiples moved down during the year. They reflect company-specific factors and market dynamics or proximity to exit. Overall, the weighted average post-discount non-Action LTM multiple across the portfolio is 13x. That's down from 13.4x this time last year. In terms of exits, 3i had a strong year with two exits in private equity and one in infrastructure, as mentioned by Simon. These were high-quality companies that we were able to sell well despite tricky exit markets. Exiting at a premium is something we've consistently done over the years since our restructuring in 2012, and that's not just in the PE portfolio. Turning back to the business line performance for the year. Our private equity portfolio generated a gross investment return of 23% for the year. Our gross return in the year was GBP 5.3 billion, of which GBP 806 million was foreign exchange movements. In terms of realization, we saw strong cash proceeds from Action and from MPM and MAIT in the year. Our investment in the year of GBP 2.6 billion is principally 3i's purchases of additional Action equity. We also made additional investments in a number of other existing portfolio companies, including Royal Sanders and ten23. Overall, the overall PE portfolio ended the period with a value of GBP 29.7 billion. In terms of the leverage position across the portfolio, we show that on the next slide. The leverage position compared to the beginning of the year is broadly unchanged. Action leverage is fairly similar. Net debt to run rate EBITDA moved from 2.7x to 2.8x over the 12 months to the end of March, even after its refinancing and cash distributions of over EUR 2.2 billion to all shareholders. Leverage across the non-Action portfolio moved from 3.5x to 3.2x over the year. As we've said before, these levels are very modest when compared to the average level of debt used across the PE industry more generally. As a reminder, we focus on simple senior-only financing structures with over 2/3 of our overall lending, ex the Action debt, which is widely syndicated, provided by banks. On to infrastructure. The infrastructure result was better this year, mainly reflecting the uplift in the 3iN share price over the year, which increased by 5%. The underlying portfolio return over the year in 3iN was also in line with its target at 8.5%. The net investment return from infrastructure, including fee income, was 10%. Together with Scandlines, our infrastructure portfolio is valued at just over GBP 2.1 billion, and it produces a very useful cash income contribution, as you can see on the next slide. Overall cash income totaled GBP 421 million. Operating cash expenses were GBP 145 million, we again ended the year with a healthy cash operating profit, even before taking into account the dividend we got from Action. Now let's take a look at our balance sheet and capital allocation. 3i balance sheet is simple and very strong, with cash at March 31 of GBP 664 million and liquidity of GBP 1.9 billion, as our RCF is currently undrawn. This is before any receipt of the approved second Action dividend of GBP 255 million, which we expect to receive before the end of May. We announced this morning that we will commence a buyback program of up to GBP 750 million over the period to the end of December 2026. Shares purchased under the program will be canceled. Let me explain the capital allocation rationale for this. When the shares traded at a premium to NAV, as they've done over most of the time in recent years, we have supplemented our business as usual investment by deploying significant capital to buy in further equity and Action at our book value, all of which has made great sense. Today, with the current dislocation in the share price to what we see as fundamental value, we have an opportunity to use some of our capital to buy back shares at very attractive levels. It's important to note that the overall composition of our portfolio today, not least with Action as a long-term hold, gives us a very good line of sight on a significant and regular dividend flow. Finally, let's turn to the 3i dividend. This morning, we announced our intention to pay a second dividend of GBP 0.48. When you add that to the interim dividend we paid in January, it will make a full year dividend of GBP 0.845. That remains subject to shareholder approval and would re-represent a growth of 15.8% on the prior year. Before we get into Q&A, I'll hand back to Simon. Thank you, James. I'd like to close with a few final remarks. There doesn't seem to be any such thing as a normal, predictable part of a regular cycle year anymore. At this stage last year, we were all digesting the U.S. tariff policies, this year we have a sizable oil shock to contend with, as well as the ongoing implications arising out of developments in AI. While FY 2026 was a challenging year for the PE industry, 3i generated strong realization in dividend cash flows, as well as generally good growth across the larger investments in our portfolio. That solid performance is underpinned by the makeup of our portfolio and its resilience to shocks from external developments. We're careful and skeptical investors, we don't like too much leverage, we back real companies that generate cash. One of those real companies is Action, which continues to generate very strong cash flows. It has also successfully opened in 15 European countries using one format and continues to grow market share. No other non-food retailer has matched Action's rate of cross-border growth across Europe over this period. We are confident that Action will continue to deliver very strong returns. We have exceptional consistency of performance across the stores at Action, with very high sales densities driving average paybacks of under 12 months. Also, in retail, the consumer always knows best and invariably before investors. Again, on this measure, Action does very well and very consistently. It may be that the current geopolitical situation will create further noise, but we will manage through that knowing that Action has traded through challenging periods before. They've done that by being true to their ethos of investing in Action's customer proposition. I'd like to close as I've done before, by reiterating that we are playing a long game and will not be distracted by short-term trading ups and downs. The shape of our portfolio is the foundation, and the competitive strength of our larger assets gives us a great deal of confidence in our compounding momentum over the medium term. Thank you, and we'll now open for questions. Thank you. We will now conduct the question and answer session. To ask a question via the conference call, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. As a reminder, participants can also submit questions to the webcast page by using the Ask a Question button. Please stand by where we compile the Q&A roster. Our first question comes from the line of Will Woods from Bernstein. Your line is now open. Good morning. Thank you for taking questions. I've got three. I'll take them one by one, if that's okay. The first one is, do you still believe that the pressure that you're experiencing at Action is cyclical and not structural? Yes, we do. This year has started reasonably well. January was a strong month. We then had a change in season, if you like, and what we have seen from the end of March when there was a week of very difficult news in the Middle East. We've seen a continued pickup in our FMCG performance from the price reductions we made in February, and we've made some further ones in May, but a quite savage pullback because of cooler weather in Europe in our seasonal categories. Those seasonal categories going into early summer probably account for about 20% of the catalog in the stores at this time. The biggest category in that group is garden and outdoor. Garden and outdoor last year over that period from the end of March to today, did a 27% like-for-like, and this year it's at -3%. We've seen very good sales in that area compared to last year, but there was a heatwave in parts of this period last year in the continent. We saw very high sales. We saw 50% like-for-likes in certain weeks. We haven't seen anything like that this year, and it's been particularly cool in Germany compared to last year. Understood. The second question is on Germany. France has been weak for a while now and you highlight Germany slowing down. What do you think is happening in Germany? Is it the basket size again? Do you need to change anything in Germany to support that? No. We remain very confident in the German business, but what we saw from that last week in March is a drop in footfall in Germany. That's quite different to what we've seen in France, where footfall is still good. We think it's the repercussions and probably the implications of an enduring Middle East situation and, you know, what that might mean for Europe in an economic and a defense sense. We do think there has been a pullback in consumer confidence, and that's impacted discretionary spending as well as the weather in Germany. Understood. The final one is, obviously, you gave guidance at the Action CMD in March. Are you still comfortable with that kind of 45% like-for-like range and stable margins for the second half? How does inflation help you with that? We're not doing anything with guidance at the moment. That guidance was given about five weeks ago. It's too early in the year to be really taking a hard look at that. We've had less than 1/3 of our sales and profits so far this year. We've got the big periods to come. We need to see the year develop a bit more before we start thinking about guidance seriously or guidance changes seriously. Understood. Thank you very much. Thank you. We will now take the next question coming from the line of Gregory Simpson from BNP Paribas Exane. Your line is now open. Yeah. Hi. Hi, good morning. A couple of questions from my side. First one would be, EBITDA growth in the calendar Q1 Action was 7%. I think it's the first single-digit figure for a while. Can you maybe help us unpick some of the moving parts behind that between the gross margin, you know, inflation and your outlook there? Second question is, I feel like the Russia-Ukraine war was more of a shock to consumer finances around the energy side and Action traded very well through that. I guess, can you help contextualize what you're seeing now in terms of customer behavior versus back then and any kind of differences you'd call out? The third one would just be on the portfolio company Evernex, which I think is, you know, is related to data centers, which is a very popular story from the market. Can you give maybe update on what on how that asset is performing? Is that is there still a kind of sales process there? Thank you. Thanks, Gregory. Okay. Let me deal with those one by one. The EBITDA growth in Q3, I mean, if you look at that first quarter, we were slightly light on sales against our expectation. It was around GBP 20 million that we were below our expected sales. We had some supply chain cost increases that were still there, which Joost mentioned at the CMD in the first quarter from the planning issues that we'd had in the previous year. That was about a 0.2% effect. There was a slight OpEx increase of about 0.1%. There were some margin adjustments that accounted for 0.2% of the difference, and we'd opened less new stores in that quarter relative to last year, which again, we indicated was on a phasing basis, there would be more in quarters two and three than last year. These were quite small numbers in our smallest turnover quarter of the year and our least profitable quarter of the year, which led to that. I wouldn't overread anything into that at the moment. Shall I deal with Russia and Ukraine? I think what we've seen in terms of customer behavior reaction to the current situation is most marked in Germany, as I called out. It's been marked not necessarily in smaller baskets as in France, but very much in footfall in terms of Germany. I think it just suggests there's more serious issues under contemplation in that country, perhaps than what's going on in the West or the South of Europe at the moment. The German consumer is notoriously cautious when there is bad news around. I don't think their politics is actually any better than ours as well. They've got a pretty perfect storm there at the moment. Evernex. Evernex is trading well and as you would expect in that business. But I'm not sure I can say anything more than that, actually, Gregory. Thank you. Thank you. We will now take our next question from the line of Manjari Dhar from RBC. Your line is now open. Good morning. Thank you for taking my questions. I just had two, if I may. My first question was on Action's inventory position. I was just wondering how you view that at the moment and the potential for future discounting on those seasonal ranges if weather doesn't pick up. Then my second question was on Action valuation. I guess the question is if like for like remains on the softer side for a more prolonged period, would that start to influence your thinking on valuation and that premium to the overall peer set? Thank you. Thanks, Manjari. On Action's inventory position, again, I tried to illustrate that, you know, even though we missed a very high comparator in the seasonal sales from last year, we at - 3% we were sort of much higher than the prior year, and we've had a decent level of sales, notwithstanding the weather. I don't think we're looking at any sort of inventory challenge, and there's a good number of weeks still to go for the summer. Summer is not over yet. We'd just all like to see some warmer weather. We're a long way from thinking about discounting. Where we are being very competitive is in the FMCG areas where we took down a lot of prices across the entire network in February. We've done the same at the beginning of this month, and we're planning more in the summer. Why we're doing that is because suppliers are telling us that they want to put up prices, and we are seeing that other retailers are beginning to pass on those prices. There is going to be an environment of price increase as we roll through the rest of the year, and we want to be the consumer's friends in that. May I add something? Yeah, if you will. Yeah. Thanks, Manjari. I mean, I think it's important to note that Action is an exceptional retail asset. Its value is defined by both its, you know, long-term performance track record and also its long-term potential. Simon sort of summarized that's made up of the combination of store growth and like-for-like growth, and that's gonna drive the compounding story. It's also important to note that, you know, when Action was trading sort of on a significant basis ahead of the peer group, historically, we didn't move the mark up. We said our approach is cross cycle and designed to withstand the test of time. You know, when we, when we consider it, any change to the valuation will be based on a discussion of valuation committee. I think to talk about moving the mark from here, you'd have to have a sustained difference performance in Action across a range of KPIs and or a fundamental reset of valuations across the sector, which would have to exclude some sort of short-term volatility. Obviously none of these situations has occurred to date. That's what I would say on that. That's very clear. Thank you. Thank you. We will now take the next question from the line of Michael Sanderson from Barclays. Your line is now open. Hi. Good morning, James. Good morning, Simon. I just wanted to go back to a couple of areas, if possible. First of all, just to understand Benelux and Netherlands obviously appears to be a bit more resilient than France and Germany. I was just interested in what lessons that we can take from maybe some of the more mature markets to understand how some of the growing countries could evolve from here. The second question was sitting around the store opening program. Obviously, there's an awful lot in the white space that sit around Germany. Would you change sort of phasing of where you open stores over the course of the year? Is that framework set and you wouldn't adjust the pace in individual countries? The third one is just a quick one. Were there any transactions in Action's equity post the most recent valuation, which you didn't participate in but other GPs did? Thank you. Okay. Thanks, Mike. If we, I mean, I think one of the challenges when you talk about, say France compared to, Benelux or Holland specifically, is that we've seen over 60% like-for-like growth in France over the last five years. Those individual stores have grown remarkably over that period. We've had many years where we've been opening hundreds of stores in France, and we're now opening around 50 stores a year. The like-for-likes that they have to compete against, whether the economy is strong, balanced or whether it's weak, it's a very high mountain for the managers to deal with. If you look at Holland, they've just been consistently doing 4% or 5%. They've been opening single-digit numbers of stores per year. It's a much more consistent profile. I think ultimately when France gets to 1,100 or 1,200 stores, I suspect it's going to look like that profile. It's incredibly well embedded business in France. It's very popular with consumers and the footfall is still growing in France. It's going through that growth phase and, you know, these stores average well over EUR 6 million. They're, they're bigger, busier stores than we see in the Netherlands. They're more like the Belgium stores, which are big stores in a turnover sense. It's a different phase that Netherlands is in, and ultimately France will reach that phase, but it's got a good few years before it gets to that phase, I would say. In terms of the store opening program, you wanted to know about the phasing? Just whether the phasing would change. I don't think so. I think the phasing is always oriented to the last half of the year. That is the big push this year. It's slightly bigger because of the way various licensing and other requirements have come about in the first quarter this year. It's picking up pace now, you're going to see it reaching last year's level and then going past it as we continue to that target of over 400 stores. Specifically on Germany as well. In Germany, there is no change. Germany is due to open 60, 65 stores this year. It's been opening some stores already. The German consumer is a more cautious consumer with new logos and new brands, they very much begun to adopt Action. All that I've talked about at Germany is a market phenomenon. It is nothing to do with Action per se. We are still winning market share in Germany, and we have some very strong categories performing in Germany. It's just that the garden and outdoor and the summer categories are a bit stuck at the moment with the weather. Then, the only recent trade has been the January trade, where we bought some more Action interest in exchange for new shares. Thank you. Okay. Thank you. We will now take the next question from the line of Christiane Holstein from Bank of America. Please go ahead. Hi, good morning. Thank you for taking my questions. I have three of them as well. Firstly, on guidance. The 2.4% like-for-like seems to imply about 5% needed to achieve the bottom of your 4%-5% range. I know you've reiterated guidance, but just wondering what your underlying assumptions are. Like, how do you expect like-for-like to re-accelerate to this 5%? Are you expecting a catch-up in seasonal sales, or do you think the macro headwinds will subside soon? My second question is on price cuts. You mentioned quite a few this year and more to come. I was just wondering how is this versus your initial expectations at the start of the year, and would this be a potential headwind for your EBITDA margin guidance? My third question was just on Germany, just if you could give any more detail here. Like, how has like-for-like growth changed for Germany or how much is it weakened by? Like, what proportion of sales is Germany? Do you think this will be structural? Thank you. Yeah, okay, Christiane. I mean, to be clear, what we said is we're not doing anything with guidance at the moment. The guidance was given only five weeks ago. It was given in the knowledge that we have pre-planned a series of price reductions across the portfolio, that the benefit in terms of volumes is already being seen in those areas and will continue to roll up through the year, we believe. That we do have our significant sales periods and significant margin periods still in front of us. We're just really talking about a five-week period where there's been a lot of noise out of the Middle East and where the weather has been cooler than last year in a number of the Northern European markets. There's no fundamental difference. We will address that at a given point in time, but we're not doing that at the moment, given how recent the guidance was given. In terms of the price cuts we're talking about, we are seeing a positive reaction both to the price cuts in February and the price cuts made this month. We're not seeing a lot of people follow us on these price cuts. In fact, they're probably having the supplier conversations that we mentioned earlier. We are seeing volume picks up, picking up as a result of those, and we do plan another large series of price cuts over the summer. These are very much focused on the FMCG categories. Germany itself, I don't think there's a lot to add. I just think you always have a very cautious competitor there, and I think it's a behavior that's affecting the entire market. We'll have to see whether some warmer weather really changes the behavior and how much is down to weather-related factors and how much is down to perhaps Middle East or economic factors. Thank you. Thank you. We will now take the next question from the line of Haley Tam from UBS. Your line is now open. Morning. Thank you for taking my questions. I have three, please, if I may. First of all, could you just clarify for us what proportion of your sales actually are FMCG and household essentials that might be more resilient to have a better outlook? That'd be useful. Thank you. Secondly, in terms of back to Germany, the context for the like-for-like now being flat year to date. I think it was more than 4% last year. I just wondered whether you could give us any color on perhaps how quickly that deterioration came through really since the end of March, and so we can get a handle on what's really changed. Then the third and final question, just on the share buyback, the GBP 750 million. Thank you for that. I think I saw you say that Action has approved a further dividend of EUR 2.55 in May. I guess I could assume we might get that times two. Can I just confirm that the buyback you've announced is all going to be funded from cash that you're generating from the portfolio and doesn't involve any planned increase in debt? Thank you. Yeah, sure. In terms of proportion of FMCG, it varies slightly by country, Haley, but it's about 1/3 of the, of the catalog. Thank you. On Germany- Germany, just how, you know, how the year has gone, I guess, is what Haley's referencing. I think at the end of March, we were around a 2% type like-for-like number in Germany. It had a weak last week in March from this footfall issue, and then it has remained subdued since that period with pretty good FMCG sales. As I said, negative like-for-likes in the seasonal categories. They've been very much part of that reduction against the high comparables last year. The buyback, I don't think we're intending on raising any new debt. We've got plenty of cash. Yeah. All right. Thank you very much. Thank you. We will now take the next question from the line of Andrew Lowe from Citi. Please go ahead. Hi. Thanks for giving the color about the FMCG mix. I just ask a follow-up and just simply what share of your sales do you consider to be discretionary across your whole category? Then if I could ask a sort of follow-up on the FMCG. You've clearly cut prices, you've mentioned that. You've got sort of future pricing cuts. Has this always been a sort of key driver to attract new customers into the store? How do the FMCG margins compare to the rest of the range? Are you able to share a bit of light about how your prices compare to your peers at the moment before the future price cuts? The final question is just a bit more of a broad question about sort of consumer behavior and response to a weaker macro environment. You've obviously demonstrated in the past quite strong revenue growth in periods of high inflation when the consumer's under pressure. You're clearly larger than you were before, so it may be natural to think that it would be harder to offset lower spending by existing customers with new customers. Could you share some insights or any data allowing us to assess the market share gains from customers who are new to the Action format, and how has that trended versus history and versus your expectations for this year? Thanks. Thanks, Andrew. I mean, we made some fundamental changes in the makeup of the stores in terms of products as a result of the pandemic, and I think today we're much closer to, I would say, a 50/50 balance between what we'd term essentials and discretionary items. That used to be more orientated towards discretionary items, but today it's about 50/50. In terms of price cuts, margin spread FMCG, we have a range of margins in our categories across the store from sort of, broadly speaking, 30% up to 50% to arrive at that gross margin of 40%. The FMCG categories obviously tend to be at the lower end. We think we're extremely price competitive this year, particularly in FMCG categories. We do our pricing baskets weekly, and we think we're very much on the front foot, and we're seeing the volume benefits of those two rounds of price reductions we made this year as well as the price reductions we made in November last year. I mean, in terms of the consumer response, we keep growing our customer base and, you know, we finished last year at 21.7 million weekly visits. We're now over 22. We're about 22.1, 22.2. You are going to continue to see a broader adoption of Action stores by customers across Europe. We have no doubt about that. Great. Thanks very much. Thank you. Our next question comes from the line of Jon Pérez from Kepler Cheuvreux. Your line is now open. Yes. Hello. Hi, good morning. Jon Pérez here from Kepler Cheuvreux. Hope you can hear me well. Just one question for me. Could you just quickly comment and give some color of on trading performance in Eastern Europe countries like Poland and also maybe on Italy, please? Thank you. Poland has been affected by some cooler weather, we've clearly seen a pullback there, not nothing like as marked as Germany and France. It's still trading nicely positively, we have seen a pullback as a result of very high seasonal sales in Poland last year, much cooler weather in Poland this year. Italy is trading very well, is continuing to power ahead with very strong like-for-like indeed. Okay. Thank you. Thank you. I am showing no further questions. I will now hand over to Silvia Santoro, 3i Group Investor Relations Director, to address the written questions submitted via the webcast page. The first question is, given the discount to NAV, how do you think about buying 3i equity versus buying more Action? Well, we've announced the buyback today because we think at this level of share price, buying through our shares is a very attractive proposition. There's another question. Is the plan to wait out the market in terms of the share price decline, or are you considering testing the valuation of Action by putting Action up for a trade sale or seeking an exit by way of a listing? We're not changing our long-term approach. We have had a deep dive into what's been happening with our share trading on our announcements. We did see a big drop in November last year on the announcement of the interims. We saw another one at the Capital Markets Day. We saw one this morning before I came in here. The high touch trading is dominated by one institution we've discovered. They were a 6% holder in this last year. They're down to about 1% prior to this. There is a big selling coming out of one particular broker, which has been the party that has sold for that party in the CMD and the November. We suspect they are doing the same again. At the CMD, we had 16 million shares traded. There was nearly 9 million, we think, of high touch trades, and this one institution did 5 million of those, and it was 10x bigger than any other institution. Today, if the broker is acting for the same party, then it looks like they're dominating the trading again. Could you explain the thought process behind the sizing of the share buyback, and if the share price stays where it is this morning, is there scope to upsize it? All right. I mean, historically, we've deployed quite a lot of capital into buying of LP stakes. We've got a very strong balance sheet. you know, we continue to invest behind our private equity and infrastructure portfolios. we decided on the GBP 750 million on the basis of, you know, what would be sensible in the context of continuing to operate within our tramlines, continuing to have all capital available for normal business. that is the basis on which we sized it. you know, I think we're fortunate, and we spent years building a very strong balance sheet, so we got plenty of capital to deploy. Can you provide, and this is back on Action, can you provide some more detail on what discussions you're having with suppliers on passing through additional costs and what we should expect for the rest of the year? I mean, we at 3i are not firsthand involved in those discussions. Obviously, that's for the buying team at Action, but, we obviously are pretty resistant to any significant price rises for the group. We tend to deal with that by making larger and larger orders, given the volume growth that we're seeing through the stores. It's very clear the behavior of the suppliers at the moment is to look for inflationary plus type price increases. Some of the retailers will be accepting that, but not all of them. There's a question on online competition from people like Temu and to what extent do you believe it affected trading in France and Germany? We think it's perhaps at the margin, but we don't think it's a significant factor. We had very good sales in those general merchandise categories last year, including in France, relatively speaking. We don't think that's a major factor for us, but we completely understand that at the margin, it may nibble away in certain categories. We have a final question, which is on the U.S. expansion, whether you can provide any reassurance on why Action is poised to succeed in an environment where lots have failed at challenging established incumbents. I mean, not many of those people who failed have the opening in international market track record that Action has. You know, it's just opened in its fifteenth country. It is a pretty stellar record. They do great deal of research before they go into any new market, and the same is true of the U.S. They have studied many case studies of how people have done it well and how people have done it less well. I think we can expect them to very much focus on how to get this right. They've been seriously looking at this for quite some time now. I have every confidence in their approach. I think that was it in terms of the online questions. Great. Okay. Well, thanks for your attention, everyone. Have a good day. All right. Bye-bye. Thank you. Thank you for your participation in today's conference. This concludes the program. You may now disconnect.