Good morning, and welcome to 3i's Capital Markets Seminar in Respect of Action's 2020 Financial Results. My name is Simon Boros. I'm the CEO of 3i and Chairman of Action. And also on the line, we have Julia Wilson, CFO of 3i as well as Sander van der Laan, CEO of Action and Joost Stiebenbeck, CFO of Action. We plan to go through the Action presentation, which has been put on our website this morning.
This morning's Capital Markets Day is focused on action. But before diving into that subject, I wanted to advise you that the non Action 3i Private Equity portfolio continues to perform strongly with good growth across the portfolio as a whole. The last 12 months have been an extraordinary time for all of us and thrown up many challenges and opportunities. Fortunately, we've seen more of the latter than the former in the 3i portfolio. Many of our investee companies, and particularly those in the consumer and retail sector, have had to adapt fast to a rapidly changing environment, and few have done that better than Action.
Action has faced significant lockdown disruption in 8 of the last 13 months and yet has still delivered strong growth in sales, profits and cash. It's been a story of fantastic adaptability on behalf of the management team and staff at Action as well as the inexorable power of the brand and its customer centric formula. The ability of all the team to almost switch instantaneously between store, click and collect and shopping by appointment at high volume Action Stores is a testament to their energy and pragmatism as well as the quality of the group's IT and supply chain capabilities. The very strong recovery in demand in trading in different countries as lockdowns have been released is testimony to the popularity of Action with consumers and the power of its straightforward offer of good products, low prices and surprise. We believe Action has performed remarkably well over the last year.
Its resilience and competitive advantage have come through very strongly in the battlefield that was 2020. This has only increased 3i's confidence in the long term compounding benefit of this asset to 3i shareholders. Now before we move on to Action's presentation, I have a few instructions on the webcast and Q and A. You will have an opportunity to ask questions at the end of the presentation. You'll be able to do so in 2 ways, by clicking on this tab and typing the question in, or alternatively, you will be able to dial into the conference call and ask your question directly.
Some of you will have received dial in details by e mail, but we will provide them again before the Q and A. There will be a 5 minute break before the start of the Q and A to allow you to dial into the call or refresh your cup of coffee. Okay. Let me now hand over to Sander to take you through the detail of Action's 2020. Sander?
Thank you, Simon. Good morning, everybody, somewhere in the world, and welcome also on behalf of Action. So my name is Sander van der Laan, and I am the CEO of Action since October 2015. Spent basically 30 years in consumer and retail, predominantly for retail companies. And I'm here together with my CFO, Joost Schliebemerg, who joined the company a little bit more than 2 years ago and also brings a lot of experience both in finance as well as in retail finance, I should say.
So I will move on to the next page, which is the agenda. So what I will do together with Joost is, first, I will give an update on the performance of 2020, which clearly was a very, I would say, different year because of the impact of Then I will basically reconfirm our strategy and also our long term objectives in a strategy update. Subsequently, Joost will take it over and dive a little bit deeper into the financial performance for 2020. And then I will come back with a trading update Because I can understand that you're all curious to hear how the year has started since COVID still hasn't left us. So that's kind of what we would like to do.
And then like Simon said, after the conference break, we would like to provide an opportunity for Q and A. So on Page 6, so you basically see a summary of the highlights of last year. And you could say despite COVID, We will still be able to deliver very strong results. And normally, we would have delivered double digit sales numbers with a 9% or 8.9% sales growth is I would say strong achievement, driven by only 1.4% negative like for like, and we will explain that in-depth Because we have realized this with very significant lockdowns and periods of 8, 9, 10 weeks of store closures in our largest markets, We've delivered €609,000,000 of operating EBITDA, 12.4% more than the year prior. That's also a very good achievement.
We've still been able to open new stores in Czech and 164 stores across Europe And again, a very strong cash conversion. In all these numbers, we will dive into the background of that in the rest of the presentation. So on Page 7, you basically see that our journey and our track record continues. So both sales, store expansion, operating EBITDA are still very much, I would say, in line with the trends. And also when you look and dive a little bit deeper into like for like, we've also made an attempt to normalize our like for like for the lockdown In particular, for the periods when stores were closed.
And Joost will explain it a little bit deeper how we got to the 10.4 because clearly you were curious about that. So moving on to the next page, and let me spend a little bit more time around that because basically when we take a step And we look at last year. You can basically break the year down into 4 periods. So first of all, we had the pre corona period. Corona was still a disease in China, and it hasn't impacted Europe yet.
So in P1, P2 and also in the 1st 2 weeks of P3, We actually had a very good start with more than 7% like for like growth in the 1st 10, 11 weeks of the year. Then basically, this week last year, we really started to be impacted by the very firm lockdowns and all our stores in Austria, Belgium and France had to be closed. A number of our stores in Germany were closed, a significant number. Some stores in Luxembourg in Poland were closed, and the only country which remained fully open was the Netherlands. Although many retailers closed their doors in the Netherlands, but they were not they didn't have to do that.
They choose to do so. So we call that, at that point in time, the soft lockdown in Holland, and that has really impacted our performance in the second half of March And particularly in P4, that was, I would say, the low point in last year's performance. And you can see the like for like which we realized. Then basically, as of the second half of May, we started to reopen in all our markets. And then you can see that we had a period of relatively Less interruption between P6 and P10 with very strong double digit like for like, and this was driven by all our markets.
We will open up the box by country a little bit later. So double digit like for like, and we've been able to do that with a relatively poor product availability. Because as you know, we at Action are very proud that we bring every week between 15,200 new articles into the store. But when the stores had to be closed, we had to create a pause in the supply chain, and that created very significant supply chain interruption basically in Q2 in Q3, and it took us to till the middle of Q4 before we were in better shape again. So despite these availability challenges, We were still able to deliver double digit like for like.
And the good thing is, we've learned a lot about that. So meanwhile, we already have the 2nd or the 3rd lockdown Either behind us or we're still in the middle of that, but our product availability today is actually better than it was before the 1st lockdown started last year. Still opportunity to improve, but we learned a great deal. And then in November, the French would say, So in Belgium and France and in Austria, we went back into lockdown. But this time, we didn't have to close the stores.
We were allowed particularly in Trans Rebellion to keep the stores open, but we were only allowed to sell the so called essential articles. So those articles which are also being sold in particularly supermarkets, food and drink, laundry and cleaning, personal care And Pet Care, we were allowed to keep selling those articles. We call it the essential categories. And most of the so called non food assortment or general merchandise assortment, we were not allowed to sell. So that was already a little bit better First, I would say, the lockdown in April, May.
And then in December, we were allowed to reopen, fully reopen France, Belgium and Austria again, but then we were impacted by the lockdown in Germany and in the Netherlands. So you can see that all these developments have created a huge impact on our like for like, and then we finished the year with 1.4. And if you would normalize it for the periods where we would be closed, our underlying like for like is actually a little bit more than 10%. And Joost will come back on that a little bit later. So very, I would say, turbulent year.
So moving on to the next page. So COVID, we had all hoped That this year we would start we would already be released from COVID, and unfortunately that is not the case, has clearly impacted the world enormously, but that's also impacted our business. So we are a company with 1739 stores today. Normally, we have more than 10,000,000 customers per week in the store, and we employ around 60,000,000 people. So our number one priority For the past 12 months has to be to provide a safe shopping and work environment for both our customers and our employees.
And we have made very significant investments into equipment, into protective materials, but also into what we call door policy. So in most case in many cases, we have to put an employee at the front of the door to basically control and monitor the customer flow into the store because we have to commit to certain restrictions per of customer numbers per square meter. So we spent significant money, time and efforts, and that went well. So up until now, I have not been informed about any customer Who has been infected in our stores? I'm not aware of any infection of a customer in our store.
And yes, we do have employees who are being infected, But the vast majority of them did not pick up this infection at the workplace. They picked it up at their private place because we also have done We are doing research for that. And in the meantime, also our offices are impacted because we have been working remotely basically 90%, 95% of the time for the past 12 months as well. And despite all of that, we have been able to manage the company properly And also to deliver, I would say, strong results in the context of the situation. So moving on to the next page.
So next to our key priority, Safety of employees and customers, clearly, we need to run the business. And yes, our plan last year was impacted because of COVID. The supply chain was interrupted. In March last year, we decided to put our total storage expansion on hold. So we post our expansion plans into Czech and also into Italy, and we decided for 2 months not to commit to any new CapEx investments.
Fortunately, already in the second half of Q2, we could see that our cash position was strong enough to start recommitting, And then we were still able to open 164 stores throughout, I would say, the year. We have been really, really very focused on cash management. That is still the case. Joost will come back on that. And our financial performance, both from a P and L perspective but also from a cash flow perspective, has remained very, very strong.
And the good thing is our 2023 business plan is not at risk. On the contrary, We actually believe that our competitive position has actually strengthened because of this. And once COVID is kind of either behind us or fully under control, We really believe that we can show the power of Action, both as a customer proposition, but also from an investment case perspective. So on Page 11, you see some statements about the expansion. We have successfully opened 164 stores Across 8 markets, we opened our first 5 pilot stores in Czech.
I will come back on it a little bit later. We opened Store 100 in Poland. We opened a new distribution center in Verrier, France, which now gives us More capacity, actually a little bit of overcapacity for the French markets, and we opened our 2nd hub in Vroclaw, Poland, and I will also go back on that a little bit later. In addition to the international expansion, we continue to strengthen our unique customer proposition And not only with this very dynamic and competitive assortment in terms of surprise, price and quality, But in addition to that, we are also investing into, I would say, new innovations. So we've actually have developed a, what we internally called, extra large Store, which is a 1600 square meter box net selling area, which you should compare to the normal range between 8 111 100 Square Meters, where we opened that pilot store in Genevieve Des Bois, which is a place very close to Paris.
Same store same articles, same prices, same promotions, a little bit of a different floor plan, More book presentation, more communication, also more information about particularly ESG, more space, more light. And all of that led to an extremely, I would say, promising sales figure of more than €400,000 of sales in the 1st few weeks. But also last week, we did more than €365,000 of sales in this store, which is 4x as much what we versus the average store in France. So currently, we are in the process of evaluating this store size. I would not consider this to be a different format.
It's a size difference. And once this is successful, we clearly are going to consider to open more of these sizable stores, particularly in the French markets. And on the right hand side, you see another innovation which we call self checkout. So with this, we are providing customers with the opportunity To scan the articles themselves and basically to pay electronically, very, very successful. Customers are instantly used to that.
Probably, they have been educated already by all the retailers like McDonald's or the supermarkets Because from day 1, 50% of the transactions already are flowed through the self checkouts, which is very, I would say, customer friendly. And in addition to that, it also provides opportunity for our store operating model. So then I wanted to make some statements About the performance in 2020 in some of our existing markets. So first of all, the Netherlands, our home market, our number 2 market, And we had a very, very strong year, 8.4 percent like for like over the 1st 8 11 periods of the year And clearly, with the lockdown in the second half of December, where we had to close all our stores in the Netherlands, we finished a little bit different With a very strong performance, a very well known brand, and in addition to the 8 new stores which we've opened across the country, We've also invested in a refreshment approach of 28 existing stores. And in addition to that, we've enlarged 5 and relocated 8 stores.
And we already have 107 stores which are now operating with self checkouts. We have 2 distribution centers in the Netherlands, and the Netherlands had a very strong performance. Maybe also nice to share with you, So we have been completely closed in the Netherlands for almost 8 weeks. And at the end of that period, we were actually elected By the consumers in the Netherlands as the store which was most missed by the Dutch consumers. So and that is also noticeable when I will come back on the trading updates.
So moving on to France. France is our biggest market with still ample opportunity to grow. So this is Page 14. We had clearly had planned more store openings last year in France, and we were hit By the lockdown, but despite that, we opened 42 stores, very strong like for like in the 1st 8 weeks and a very strong like for like, I would say, throughout the summer. Meanwhile, we are having more than 2,700,000 customers per week, and sales is being driven by a combination of like for like and expansion store expansion.
And then Germany. Last year was a fantastic year for Germany. Despite all the corona, let's say, complexity on Page 15, we were able to open 42 stores We have very, very strong like for like figures. I'm particularly pleased that also our stores in the south of Germany in Baden, Gothenburg and in Beiren Where we started to expand aggressively in 2017, those stores are really starting to trade very, very well. And given the fact there are 83,000,000 people living in Germany, we will soon will open store for 100.
We still believe there's a huge potential to grow. And what you can also see is that particularly that the FX sales per store is really starting to grow quite significantly, £3,300,000 last year versus £2,800,000 in 2017. And from a value creation perspective, this is the key number to watch. And in addition to that, I'm also pleased to see, and that is a result of a more selective approach, I would say, And also the average sales of our new stores is really starting to improve because €2,900,000 for 42 stores is a very, very good number. So very promising, I would say, development in Germany.
Then Accelerated by the lockdowns, we also have I'm proud to say that we have now also developed a click and collect version At Action, we didn't have that before the lockdown started, but we have learned that once the store is closed or partly closed, there is really an appetite Customers to go online, to select the store, to select the assortment and basically to select a pickup moment. And then the customer goes to the store. And basically, at the service desk in the French and the Belgium stores, you could pick up the articles and pay for that. In the Netherlands, we were not allowed And we were also not allowed to offer Click and Collect up until week 6. Because what you see on the right hand side of the slide, in week 6, we started to offer in the Netherlands click and collect only because we were not allowed to do any more than that.
And we were really very positively surprised Yes, we were already able to do €8,800,000 of sales in that 1st week, which would be 28% of our of the sales. There was an index of 28 versus the prior year. And then you could see that in week 7 week 8, the sales started to develop. Then as of week 9, the Dutch government invented something new. It's called shopping by appointments.
And normally, you wouldn't do that in a large Shopping in a high volume shopping environment like Action, but the concept was basically that in addition to Click and Collect, a customer could go online. And at that point in time, we are allowed to have a maximum of 2 customers, only 2 customers on 1,000 square meters net to have 2 customers in the store, And they had to stay in the store for at least 10 minutes. So the theoretical maximum capacity per hour was only 12 customers. So I'm still happy to see that in week 9 week 10, sales improved, and you could also see a certain shift from click and collect to shopping by appointments. And then fortunately, the Dutch government made an additional decision because as of Tuesday this week, we are now allowed to handle 1 customers per 25 square meters.
And that means that we can now handle roughly 100 And that is really making a huge difference. So our budgeted sales for this week was €32,700,000 And we actually believe that we are going to hit that number. We had a very strong start on Tuesday and a very good day yesterday. So on Tuesday, we had actually a like for like of plus 70%. And we can also see that the appetite for Click and Collect is now Quickly kind of reducing, although still yesterday, 13%, 1% 3% of our sales was Click and Collect.
So I'm much more optimistic in that sense about the sales outlook for the weeks and the months ahead of us. So even if we need to operate this shopping by appointment model in combination with Click and Collect, we actually believe we can deliver very good sales numbers. So finally, to wrap up on last year's performance. So in 2017, we also had some additional other notable successes on Page 17. So we have made significant investments into our digital customer interface.
We have also made a very significant investment in A new supply chain planning tool, which we call Symphony, which is basically why we already actually had Symphony and we've expanded the functionality, which allows us to manage the end to end flow of goods basically from the source to the stores in a much more efficient and effective way. We have been rolling out our workforce management system to all our stores. We have further strengthened our private label portfolio, And we also made significant additional steps in the domain of ESG. And what you see on the bottom right of the picture is a big action truck. We actually had 2 trucks which we filled with goods.
And those 2 trucks, they've been driving to Lesbos because there were a lot of Refugees living in those tented camps and our drivers volunteered to drive with an action truck full of essential goods basically to provide some relief to the people over there. Moving on to the next topic, which is about the strategic part. So I already said despite all the turbulence of COVID, We are still very, very comfortable about the strategy and the business plan going forward. So on Page 19, you see a lot of, I would say, similar statements as you've seen before Because up until last year, we were presenting to a strategy with 4 pillars: strengthening our unique customer value proposition to drive like for like secondly, geographicinternational geographic expansion, basically replicating the action format across more territories, strategy 2, building scalability across all those countries in the chain And then build and then developing an organization based on people and values. But now you see another, Let's say, a box on this slide, and that's the green one, making or make sustainability accessible.
We actually believe that ESG, internally we call it actually ASR, Action Social Responsibility. We believe that it's so important in both our customer proposition, but also in the way we operate that we have decided to elevate Sustainability and social responsibility into our strategy into basically a 5th pillar. So we have already done a lot of Activities in the past few years, but we want to make a point both internally and also externally that we want to do more We want to do better, and we want to accelerate. And therefore, we have elevated this into our strategic framework. So on Page 20, you see basically the key ingredients of the winning customer proposition of Action.
We are a one brand, one format business with only 14 categories and only 6,000 SKUs. But every week when you walk into our store, there is new merchandise, there are new articles, between 150 and 200 new articles every week. Every day, we commit ourselves to the lowest price possible. We are fundamentally or largely an everyday low Retailer, EDLP, and only 8% of our assortment of our sales we generate with a promotional price. We offer a very convenient and easy shopping environment, and we want to offer good quality products, which are sourced and delivered in a sustainable and responsible way.
We are called a non food discounter, and we do believe that we have a very unique proposition and operating formats. And with that, on Page 21, we make the action wheel of retail fly. So we have a very distinct proposition, which drives customers to the store. Then we have an unbeatable financial model We have an average payback of a store of 1 year based on historic openings. We generate all the cash which we need to invest In new stores, in IT and supply chain, we generate ourselves.
And then again, we can reinvest the surplus of that into the proposition. And still, we are making a very, very or driven by that, we make a very strong profit and a very healthy and strong cash flow. So let me move on then to some, let's say, statements I would like to make about our strategic investments. So on Page 23, On the left hand side, you still see the same 14 categories as we had them last year. And we've also evaluated or we are evaluating these 14 categories And we still believe that these are the right 14 categories to carry.
But within those categories, we have a lot of flexibility to adjust. And for instance, we have made some significant changes within those categories to accommodate the needs of customers by developing and buying new cleaning items, face masks, protective measures, etcetera. So we're very, I would say, responsive way of adjusting our assortments. In addition to that, we are also making more and more steps from an innovation perspective and also from a quality perspective. And that is being recognized not only by customers, but also by other, I would say, institutions.
And particularly, our buying team is very proud that they receive So are receiving multiple awards for that. Then on Page 24, on the left hand side, I'm reconfirming that twothree of the assortment is dynamic, and only onethree, only 2000 SKUs are standard SKUs. So I always say you only have This covers the beauty of Action. Once you have visited us for 52 times, you really need to visit our stores for 52 consecutive weeks before you got a really good feel for what we offer and how relevant we are in each every week. And on the right hand side, you can see that that is being recognized.
So does Action offer a surprising assortment? Yes, that's the answer most of our customers are giving back to us and also when you compare that to the closest competitor. And by the way, you can see that in Poland That is one competitor who is apparently a little bit more surprising. That competitor is actually Castorama. So that's a do it yourself chain.
So apparently, in the do it yourself domain, we got some work to do, and that's good because there's always an opportunity to improve. But you can see fundamentally, we have a very unique point of differentiation. Next to Surprise, And now moving on to Page 25, it's very much about price. So we claim that we're not only the cheapest in town On a comparable basis vis a vis the competition, but also when you look to the different price ranges within our store, We really manage that very carefully. So 60% of what we sell sits below €2 The Average price, we realize, sits depends a little bit on the country around €1.80 including VAT.
So why has Action not yet developed an e commerce proposition as in home delivery? Well, one of the reasons for that, the net selling price Action article sits around €1.45 It is pretty difficult to make money on €1.45 And I can challenge or invite you, go to the website of Amazon, Alibaba or whatever or any local, that's your e commerce player. In that segment, it is we are really, really very, very competitive. And also, we are standing out from a pricing perspective, as you can see again, on the right hand side of the slides. On Page 26, there's a lot of data.
We are providing this data every year, and I'm not going to spend too much time on it. The message on the right hand side, we have a very well strong brand, in particularly Belgium and in the Netherlands, and still a big opportunity to grow in France, Germany, Poland and in Austria, which is actually a growth opportunity going forward. And also from a penetration perspective, so 64% of all the people in the Netherlands have been in an extra store in the past 6 months. And you can see that in Germany and France, those percentages are significantly lower, and then you even need to correct this for the fact that we're not yet operating naturally in those markets. So moving on to Slide 27.
On the left hand side, you see some examples about high volume articles. So for instance, when you look to face masks, we sold last year 76,000,000 face masks across Europe. So if you talk about Action being essential retailer, I'm quite sure that in the Netherlands, we have been the market leader in face masks in those periods where we were open. But also disposable gloves, a very, very high volume item. And on the right hand side, you see the difference in sales density between us And the average competitors, although I have to share with you these numbers are based on 2019 statistics Because of the COVID distortion, it didn't make sense to update these numbers for last year because that would not give a realistic picture.
On Page 28, some examples of the results of the investments which we've done in our digital interface. So 2,300,000 people on Facebook being Actionfed, 21% up. 272,000,000 web sessions, 38% up. As a matter of fact, last week, we had across Europe more than 10,000,000 people Visiting our website. And clearly, this was also drifting by clicking, collecting by shopping, by appointments.
But there's an enormous drive of people who go to the website, They're looking for information. They're looking for information. They're looking for prices. They're looking for stores. We really, really are getting traction also in the digital domain.
And I'm also very happy and proud to announce that once the lockdown in the Netherlands is finished, that we are ready to launch our Action app in the Netherlands first. And well, we really think that is going to be a big success as well. So in the following years, we would like to roll that out across Europe. So moving on to sustainability or ESG, a very big and important, I would say, point of differentiation. So on point on Slide 30, we actually see an ad which we've published in France, Belgium, the Netherlands and Germany, Where we would like to tell to the customers that you can really shop safely in an Action Store and that we also wanted to make the point towards the customers that we have very Relevant, essential articles for people's everyday life and also in complicated times of COVID, And we are offering those articles again against the very, very low prices where people are kind of used of Action.
On Page 31, You can see that in the past few years, we have already made very good progress in the domain of ASR. So for instance, on the plastic We have stopped selling disposable plastic bags in all countries last year. We have also proactively decided to stop selling Single use plastic plates, plastic cups, plastic silverware. In a year from now, there will be European legislation, and we decided We already commit ourselves to that legislation 2 years in advance. We have committed ourselves a few years ago to move for all our Textiles and Clothing to 100 percent BCI.
And last year, 76% of all the cotton we sourced was already BCI. And also for sustainable timber, you see some examples and also some hard numbers. So really, I would say good progress And therefore, we have updated our sustainability strategy, and we've decided that we want to commit ourselves To 4 specific developmental goals, which are also being embraced by the United Nations. So the United Nations a few years ago have defined 17, let's say, sustainable development goals. And we believe that in 4 of those, there are very relevant 4 of those are very relevant for, let's say, the action format and also the action organization.
So the first one is about responsible consumption, and we've developed a philosophy around the product pillar. And I'm not going to walk through all the statements on that slide, but this is basically the ambition and the objective which we formulated. We have committed ourselves to the environmental pillar. We have committed ourselves to the people pillar, and we have what we internally call the good citizenship pillar. And for each of those pillars, we have defined specific objectives and plans.
So I also said earlier, maybe I should explain it a little bit more. So when we launched strategy, make Sustainability accessible. I think sustainability speaks for itself, but I think the word accessibility requires some explanation. What you often see is that sustainable companies are also starting to increase prices, where that only premium companies are can afford to, let's say, to offer What we would like to do, we want to make sustainability accessible for everybody, and we want to make sure that in the price Our articles, sustainability is built in. We are a big company.
We buy big volumes. So we believe if Action commits to something, And we can really make a noticeable difference both towards customers but also in the supply chain. So we want to make sustainability accessible. On Page 33, you see that for the product domain, we have formulated a number of objectives: safety, social compliance, Property and Manufacturing Packaging. And for each of those, we've defined specific objectives and specific timing.
For some of them of all of them, we're working on that, and we also are going to report on that. So on Monday morning next week, we are going to release Our Annual Update 2020. And in our Annual Update 2020, we will disclose a lot more information but also a lot more progress in the domain of sustainability. On Page 34, you see some examples of objectives which we formulated for environment. So for instance, yes, Action uses packaging to transport and to protect our products.
And we have a program to reduce the amount of packaging, To completely recycle all the packaging we use and to make sure that we're moving towards materials which basically are, I would say that replaceable. But also on the energy side, we are working with double deckers. All our stores have LED lightning. Yesterday, we've approved an investment in energy monitoring equipment, which means that we can centrally see how much Energy each store is going to use is used across Europe, and we can regulate that. We have improved an investment in solar energy and Solar panels for all our new warehouses, but also our existing warehouse in Zwagdijk, 110 Square Meter Roof is going to be equipped with solar energy panels in the next few months.
So we're making very, very significant investments, I would say, throughout the supply chain. And we also are going to communicate a lot more about that. So already last year, we introduced what we call the green thumb, It is basically a symbol towards our customers. And in every week, in all our commercial communication, we're using the green thumb for certain articles to demonstrate that we are making progress in the domain of sustainability. So let me move on to international geographic Spansion, Slide 36.
Basically, this is a refreshment of last year, and the message is we have a very strong format, which is highly replicable across countries, and the average historical payback of our store is 1 year. All our stores opened before On Page 37, we don't have a desire to develop more brands Or to create more complexity by developing more formats, although I did explain to you the click and collect And also shopping by appointment, you could say, is a certain in a way, there is a format, But we're still offering the same articles against the same prices. So in that sense, it doesn't create too much complexity throughout the organization. So on Page 38, you see a map of Europe because that's the continent we want to focus on. On the right hand side, you can see Currently or by the end of last year, we had 17 16 stores opened in our 8 existing markets.
So this includes the Czech Republic. And you can see that in those markets, there is still a lot of white space or actually a lot of light blue space. For instance, in France, we have now almost 600 stores open, and we believe we can go to at least 1100 stores in France. In Germany, we will open store 400 soon, but we believe we can at least go up to 1200 stores in Germany. In Poland, we will open we have 105 stores today.
We believe we can at least grow to 500, 600 stores in the years ahead of us. So in the existing markets, There is already a lot of opportunity. And we believe that the European continent has an opportunity for at least 6000 Action stores in the years ahead of us. In 2020, we opened the first five stores in Czech. We evaluated those successfully, and we also had planned our store pilots in the north of Italy, which unfortunately we had To postpone to Q1 2021, I will come back on that.
And then we're currently working on the preparation of our store openings in Spain, which we intend to do in Q1 next year, I would say, subject to the COVID developments. The idea would be that we will open our 1st stores in the Catalonia area, which we will basically supply from our Lava Steeda warehouse, which sits in the south of France. So let me say a few things about those new markets. So the Czech Republic, 11,000,000 people living in the Czech Republic. The Czech Republic is, at this point, not the place to be from a COVID perspective because they are really, really fighting very, very hard And with very, very high infection rates, so every week, 1% of all Czech people are getting infected in the past few weeks.
So currently, we are open in the Czech Republic selling essentials only, roughly 55% of the assortments we are allowed to sell. But despite all of that, we have a budget to open at least or to open 12 stores this year, and we are going to do that. Actually, in the next 12 weeks, we're going to double our network in Czech, and we are going to open 5 stores, and we are able to build, Phil opened and operates those stores even, I would say, during the lockdown periods. So we are very optimistic. We have 2 distribution centers in Poland sorry, in one in Poland and one in Bratislava, Slovakia, Which can supply the Czech Republic, so we do not have to make additional infrastructure investments to unlock this opportunity.
And the sales per store in Czech is beyond our expectations. We have taken the Polish sales as a point of reference, And we are already very happy with the Polish sales, but the Czech sales has significantly outperformed the Polish part. So moving on to Page 40. We are currently planning or we have plans to open between 57 private stores in the north of Italy, In the province of Lombardia and the province of Piedmont, that is actually the plan. Lombardia, that was actually the place which was hit The hardest by the COVID situation last year.
So therefore, we had to postpone our store openings. We have now planned the 1st store opening in Vanza Gallo, which is a town north of Milan in the Q1. The current plan is to the original plan was to open the store in the beginning of April, although it could very well be that we need to postpone it for Few weeks since Italy went to a very firm national lockdown again last weekend, which at this point in time is supposed to end at April 6. But whether we're going to open beginning of April or the end of April, it's not going to change the potential of the north of Italy. Italy has almost 60,000,000 people And 28,000,000 Italians are living in the north of Italy.
And the wealth, the GDP per capita in the north of Italy is very similar, I would say, to the Benelux. So we are very, let's say, curious to see how things are going to develop. And clearly, we actually hope that we can approach the average sales per STORE as we have realized in France, but we don't know that yet. So therefore, we're going to do a test. And once we will roll out Italy, hopefully, in the course of next year or start with We will also then start constructing our first DC, which quite likely will be built a little bit north of Milan as well.
So moving on to scalability, and we have made some choices in this update this year. So therefore, I'm not going to make Too much statements about that, but on Page 42, you see an overview of the distribution network. And all these colors are basically representing The stores which are being supplied by the DC in the middle of that. So basically, what you can see that we are trying to create a higher density of DCs, because the distribution cost of Action, the supply chain cost, you can basically break them down between the DC operation and the transportation costs. But after a certain level of number of kilometers, it becomes inefficient, and then you need to open a warehouse closer to the base closer to the markets.
So I'm also happy to share with you that finally, if we are allowed to open our warehouse in Bratislava, That warehouse was actually already constructed last year, but then we ran into a number of permitting issues. Meanwhile, that has been resolved. We are now in the process of preparing the opening of the warehouse, which will start to supply the first stores as of week 30. And that basically means that all the auction stores are going to be shifted from our Beebelish warehouse and our Oshawa warehouse, and that will reduce The transportation distance on average per store with 3 57 kilometers. So the 70 stores in Austria, They will basically benefit greatly, not only in terms of profitability, but also in terms of flexibility because now we are also able To open a lot more stores in Vienna, which is a big city, 1,800,000 customers are living or potential customers are living in Vienna.
And Vienna sits very close to Bratislava, so that will again help us to accelerate in on that part of Austria. Embraer Slava can also help us to unlock the opportunity So building our 2nd warehouse in Poland, in Birun. That warehouse is supposed to be finished by the end of this year. And this will be the 1st warehouse Outside the Netherlands, which we are going to operate ourselves. So you probably know that all the other non Dutch warehouses are currently being operated by an LSP, a logistical service provider, but we've decided that we would prefer to have a little bit of a hybrid approach also outside the Netherlands.
We believe that the Polish markets, since we also have a lot of Polish supply chain employees across Europe, which we can also Use a little bit is a good opportunity to test the water. So that DC is supposed to open in the second half of this year. Then moving on to Page 43. So Action has a very significant ambition also to grow its portion of direct sourcing. What do I mean with that?
With direct sourcing, I mean the articles which we source directly ourselves in the Far East. So we fly to the Far East. Our buying team goes there. We work together with our partner, Li and Fung. We visit factories.
We control these factories. And that portion and we really want to drive that portion of our sourcing. It's currently around 12% of sales. But in the next few years, we want to 12% to 30%, we want to move to 20% of sales. However, that also means that we will receive more Containers directly and our DCs are actually not really built and designed to receive those containers.
So we've now developed a new, let's say, philosophy, and that's what we call the hub. So a hub is basically a receiving place for containers, Particularly from the Far East, we will unload those containers. We will palletize the products. We will store those pallets in the hub. And then we will keep the inventory.
And basically, we have a kind of a mini ecosystem because the hub is basically supplying the surrounding BCs. We started with that in Martin de Croix, which sits in the south of France. We did the second hub or we opened the second hub in Vroclaw, Poland. And in the future, we're going to open 2 more hubs, although we haven't planned or timed those 2 hubs yet. But this is really going to help us to create More availability and also more, I would say, flexibility and speed in our supply chain.
So I would say a few examples of building more scalability. Moving on to the last topic, which is about organization, people and value. So on Page 46, you see an overview of the C and A management of Action. I'm very happy to share We have recently recruited a new Director of Store Operations. His name is Florian Knauer.
He is 38 years old, or I should say, young, Worked for almost 18 years for Rosman, so a large international drugstore operator, Has been living and working in the Czech Republic and in Hungary and has been responsible for multiple countries within Rosman for the past 18 years. So he joined our company as of the beginning of this year. And as of April 1, he will take charge of store operations and basically the country operations. In addition to that, we have also recruited our 1st general manager for the Czech Republic and our 1st general manager for Italy, So Peter and Filipe, both of them are going to join Payroll in the next few months. And after an induction program, that we will make sure that we have our own local Italian Czech team on the ground.
The last part I wanted to cover is about values. So as you know, Action is a discounter, and we do not only have a very successful and distinct customer proposition and a very unique, I would say, Financial operating model, but we also have a very strong organization. And we believe that the way how we work together, the way we treat people, The way we behave also makes us very I would say different and is a very unique and important ingredient of the Action success. So values like customer focus, teamwork, simplicity, discipline, Cost consciousness and respect are very, very important. And we have developed an approach, and what you see on this page is a little booklet.
We're cascading this approach basically from the executive board up until, let's say, operational level in all our stores and all our warehouses. So all our employees are being touched and being motivated and being informed, Instructed, inspired with this program, and we call it internally the Be Actionable program. So with that, my strategy update is coming to an end. So basically, to wrap up, we did have a very strong year of 2020 in the context Of the complexity of COVID, it has not harmed our ability to compete, and we are still very, very confident about the potential of the company. And I would now like to ask Joost to dive a little bit deeper into the financial performance of the company in 2020.
So Joost, please go ahead.
Thank you, Sander. Good morning. My name is Joost Slippenbeek, and I'm the CFO of Action since November 2018. In the next about 30 minutes, I'm going to cover the following: first, our financial performance in 2020 Then our cash management during the year and especially during the 2 lockdown periods. And finally, a few notes on how our operating EBITDA reconciles to EBITDA under IFRS.
On Slide 48, I start with a slide that you have seen before. It is the financial model behind our strategy, and these fundamentals remain unchanged. They also explain the resilience of our performance even in a year with COVID-nineteen. The most important elements are the 2 main value drivers for Action being like for like and the opening of new stores The fact that the model is highly repeatable and the performance is consistent over various dimensions, Countries, categories and stores. The payback of our stores, which is very attractive Because we rent our stores and the investment spend per store, despite the fact that it creates a very attractive store, is relatively low.
And historically, we've had an average payback period of around 1 year. Our business model also has a negative total working capital that generates cash where we grow. And then finally, our model is proven and it can be applied to many more countries than the 8 where we are active today. Moving on to Slide 49. I will use that financial model and the usual performance metrics to comment on our 2020 performance.
But As you've heard from Sander, 2020 has been a truly exceptional year. And to understand Action's Financial performance, you need additional information. Therefore, I will also cover The impact of the specific circumstances in 2020 being the extra 53rd week, Our like for like can be normalized to adjust for the impact of lockdowns and the impact of COVID-nineteen And social distancing measures on operating costs. And then in addition, I will talk about How Germany, Austria and Poland have come of age with store contribution margins increasing significantly and how we have continued to invest in Action, albeit with a lower store rollout program due to the pandemic. Moving to Slide 50.
In accordance with The financial year 2020 included a 53rd week, which ran from 28 December to the 3rd January of this year, 2021. Last time this happened was in 2015. In our management reporting, the impact of this 53rd week is separately reported for a better year on year comparison. That is also what I will do in the remainder of my presentation, unless I mention specifically otherwise. Also, like for like sales growth, as you undoubtedly know, is always calculated on a 52 week basis.
So the 53rd week generally is relatively profitable as mostly only variable costs are allocated to this week. However, in 2020, this was different because this was a short trading week with a New Year's Day on Friday And also with a significant number of Action stores closed or restricted to selling only essential items. All in all, this extra week contributed €67,900,000 of net sales and €7,200,000 of operating EBITDA. Below right on the slide, you see the run rate EBITDA. The reduction in new store openings As a result of the pandemic, from 230,000,000 in 2019 to 164,000,000 in 2020 led to a reduction in the EBITDA run rate adjustment from $60,000,000 in 20 19 to $35,000,000 in 2020.
Moving to Slide 51. Our reported like for like for 2020 was minus 1.4%. However, this number, of course, was significantly impacted by the two periods of lockdowns. So this was for the 1st period weeks 12 until 2019 where we had store closures Or assortment restrictions across all markets except for the Netherlands. And then the second lockdown, which was weeks 44 until 52, where assortment restrictions impacted France, Belgium and Austria in period 11 And Germany and Austria in period 12, as stores were closed in the Netherlands as of Wednesday, 16th December.
In order to have a like for like data point for the year that is reasonably comparable to prior years And also can be a reference for 2021, we've adjusted the like for like for the 2 impacted periods to calculate a normalized like for like. Including these adjustments, A normalized like for like for 2020 would be plus 10.4%. This is significantly higher than the minus 1.4 percent but also then the average of 6% for the 6 years before 2020. And that is a reflection of the following two facts. First of the significant impact of especially the first lockdown, where at the lowest point, We had approximately 930 out of 1568 stores closed completely And a further 204 stores only allowed to sell essentials.
But more importantly, It's also a reflection of the fantastic performance of our format in the period in between the two lockdowns, Where our like for like was +12.7 percent. Now let me explain How we went about calculating the adjustments? We've taken a slightly different approach for the 2 lockdown periods. For the 1st lockdown period, we first of all decided not only to adjust for the period that stores were closed That means that the period continues up to and including week 22, and that is 3 weeks after all stores were open again with the full assortment. To calculate the adjustment, we've used the realized like for like for this year for 2020 Year to date, week 11.
We've applied this on a country by country basis. So if a country reopened earlier, We've only applied the adjustment for the relevant period that it was closed. The adjustment brings like for that period from a reported minus 34.9% to plus 7.4%. In the 2nd lockdown period, we had a different situation because more of the lockdowns were range restrictions. For the 2nd lockdown, we've used the year to date performance up to and including quarter 3 as the basis for the adjustment.
But were relevant with the adjustment for the 1st lockdown period included. Again, Same as for the 1st lockdown period, we have applied this on a country by country basis. And in addition, We have adjusted for a reopening by using the year to date like for like also for the 3 weeks following a reopening. So that leads to the picture on Slide 52. In the first period, from week 1 up to and including week 11, we outperformed our budget.
Year to date, end of week 11, we had overall sales growth of 22% and a like for like of plus 7.3%. In the second period, from week 12 up to and including 'twenty two, The first lockdown had a considerable impact on the business, leading to an overall sales decline in this period of 29% and a like for like of minus 34.9%. You can also clearly see on the graph That we have included weeks 20 up to and including 22 in this period as these weeks were helped by a reopening effect following the lifting of restrictions. Adjusted like for like over this period was plus 7.4%. And just as an aside, so today is 1st day, 18th March, which is 1st day of week 11.
And that means that next week, we will start the cycle against the 1st lockdown with our reported number. The 3rd period between the lockdowns was from week 23 up to and including week 43. In the 1st 3 months of this period, we were working hard to restart our supply chain and rebuild the performance, which meant that availability was not at normal levels. Although these availability issues have certainly impacted sales, It is impossible to determine the extent of this impact, and therefore, we have not normalized for this. In this period, we nevertheless realized a remarkable overall sales growth of 23.9% and a like for like Plus 12.7 percent.
In the last and 4th period, we had the 2nd lockdown. Overall sales growth was 23.3 percent like for like minus 4.8% and normalized Like for like was plus 11.3%. Now that I've explained how we calculated the normalized Like for like, I also want to give 2 disclaimers. First, we've taken an approach to determine the adjustments which we think make sense and can be justified. Having said that, I also acknowledge that our choices involve judgment.
For instance, our decision to include the reopening effect in weeks 'twenty through 'twenty 2. My second disclaimer is that although there were no significant lockdown restrictions in the period from week 23 up to and including week 43, Customer behavior was no doubt influenced by other circumstances. It is impossible to determine the impact of this, And therefore, this has not been adjusted as we also did not adjust for the availability issues in the 1st 3 months of this period. That means that we need to take this into account when comparing the normalized like for like for 2020 with prior years or with 2021. On Slide 53, you see the like for like In the period in between the 2 lockdowns and then per country.
As you know, Like for like includes the ramp up of new stores and therefore is different across markets depending on their maturity. Taking that into account, the like for likes in Germany and Austria are incredibly strong. Analyzing the drivers behind it is difficult. We've seen that customers have changed their behavior because of COVID-nineteen. Generally speaking, they've made less frequent trips, but with bigger baskets.
The extent of these changes is, however, different per market and for the periods in the year. But we believe that in Germany and Austria, the like for likes are certainly also a reflection of increased awareness and customer appreciation for our format. In addition, in Austria, it's also because of the changes that we've made in the organization in 2019. So moving to Slide 55 sorry, 54. Let me take you through the 4 quarters of the year and explain the way COVID-nineteen has impacted our numbers.
In the first two periods of the Q1, we had a strong start and we're performing above our budget. Year to date period 2, we had overall sales growth of 22% and EBITDA growth of 47%. Then the first lockdown had a considerable impact starting week 12 in period 3, which by the way is a 5 week period, Leading to an overall sales growth for the Q1, as you can see on the slide, of 9.1% And EBITDA growth of 5.6%. Then in the second quarter, the lockdown continued for the 1st 6 weeks of That means both our period 4 and 5 were impacted, leading to an overall quarter with negative sales growth of 8.8% and negative EBITDA growth of 19.5%. Period 6 was the 1st full period with all stores open.
Although we were then working hard to rebuild performance of the supply chain, which meant that availability was not yet at normal levels. In period 6, we realized a remarkable overall sales growth of 22% and EBITDA growth of 44%. In the 3rd quarter, sales continued to be strong, And operating leverage meant that this translated into good profitability. Overall sales growth was 23.3% and EBITDA growth 43%. Finally, in the Q4, we had the 2nd lockdown, which took different forms and periods.
In the periods that we were open without restrictions, we had strong sales, leading to an overall sales growth in the quarter of 15.3% And EBITDA growth of 17.9%. During the year, In some of the situations where we were forced to close stores, we have received wage subsidies for furloughed staff For a total amount of €18,000,000 of which €15,000,000 related to France. Note that in these situations, We have supplemented the subsidies in all cases to at least 80% of normal wages. Then in addition, we negotiated in total €9,000,000 of rent discounts for stores that were closed. At the same time, we had to incur in total €25,000,000 of extra wage costs To maintain social distancing with dog policies, extra hygiene, etcetera.
So if I then move to Slide 55, you can see our store openings. At the end of period 2, we had opened 9 new stores, which was pretty much in line with our budget. Then at the beginning of the first lockdown, we had to decide to hold our expansion to conserve cash. As the uncertainty at that moment was considerable, this meant that we not only stopped CapEx, which means building stores, But also signing new contracts. So we did not enter into any new obligations.
Although we could already reverse this after 2 months at the beginning of May, this nevertheless meant that we could not catch up with opening Again, soon because we first had to refill our pipeline. All in all, This meant that we ended the year with 164 new stores, which is 66 down from 2019. The good news is that we've worked hard on the pipeline and now have the ambition to open 300 stores in 2021, And that is significantly higher than the average of €235,000,000 for the period 2017 until 2019. And also, as Sander already mentioned, in 2021, we plan to open pilot stores in Northern Italy later this year. On Slide 56, you see our margins across categories.
An important reason for our success is our margin management. Our brand promise is more than you expect for less than you imagine. This translates into the lowest price and a great surprise. So that means that within our chosen categories, We can offer a changing range of products. And that again allows us to buy only products that also provide an attractive margin And that shows in the consistent and stable margin performance across categories.
Of course, the lockdowns have impacted gross margins. There's a country mix effect, which on the whole for the year has been limited, but it was significant in certain periods, for instance, when France and Belgium were closed in the spring lockdown. And also, the share of promotions has been lower and promotional margins slightly higher. Nevertheless, this has not led to significant changes in our margins and margin development, Not for the whole and also not for categories. Also, the impact on obsolescence COVID-nineteen was limited to 5 basis points higher, and that was mostly because of the impact of the spring lockdown on our Easter season.
Then on Slide 57, I want to show profitability. And I want to analyze this for the period in between the two lockdowns, and these are our financial periods 6 through 10. And for the stores that were open for a full year, both in 2019 as well in 2020. So this is the 13 22 stores that were opened before 2019. So the analysis starts with the like for like drivers.
The like for like in these periods was mainly driven by a higher ticket amount. That means that on top of our normal operating leverage, we had extra leverage when comparing OpEx to sales. So this slide shows the average store contribution margin, And it compares last year with this year. Overall, the increase was 120 basis points. And the increase correlates with like for like growth.
So in the Netherlands, where we did not have to close the stores during the first wave, The like for like in this period was 8.8%, translating in a store contribution margin, which was 60 basis points higher. In Belgium and France, the increase is even more significant, but in both cases, 100 basis points. But then in Germany, average store contribution margin has improved with a very significant 2.85 basis points. Also, if you break this apart for the stage for Bundeslander, you see that we've made the strongest progress In the Bundeslander, where we until now saw a somewhat longer ramp up of like for like sales, and that is in the East The South, mainly Bavaria and Berlin. And this brings Germany in line in In terms of average store contribution margin with the Netherlands, Belgium and France.
And most of that was driven by the 20% like for like with margin improvement and productivity adding as well. Finally, Austria and Poland have, In addition to the leverage from additional sales, the leverage that is typical for the build up phase of new countries, Plus that in Austria, we have made organization changes in 2019 that are also showing good results. Then on Slide 58, our CapEx development. In 2020, CapEx Increased €37,000,000 or 17 percent to €173,000,000 26,000,000 of that is explained by less store openings, 164 in 2020 versus 230 in 2019. The remaining difference is mostly explained by $14,500,000 lower CapEx for new DCs.
Included in the number for 2019 were investments for the 3 DCs that we opened in 2019 plus Investment for 2 further new DCs, one being Bratislava in Slovak and the other one being Verrier in France. And Verrier became operational in week 47 of 2020, whereas Bratislava was delayed to 2021 because of permitting issues and will start outbound in week 30 of this year. Notwithstanding the above, We were able to continue to invest in a number of core IT infrastructure projects consistent with our actions in recent years. This consistent investment, together with the quality of our staff, has played an important part in delivering the operational resilience and flexibility that was important to our ability to flex to the challenges of the pandemic in 2020. On Slide 59, you see our cash conversion.
So when we had the Free Eye Capital Markets seminar last year, which was the 19th March, Sander and I have briefed you on the 1st lockdown and the very significant operational impact it had. In that meeting, I've also explained our response to this and the actions that we had to take in respect of cash conservation. Because of the impact of the closings and also the uncertainty at that moment in relation to how this would evolve, These had to be decisive actions with immediate effect. So we postponed orders And extended the payment terms of the outstandings with 30 days. We delayed the rent payments for stores We reduced investments in expansion and we have used the facilities That governments put in place to postpone tax payments, including corporate income taxes, VAT and wage taxes where applicable.
In addition, in certain countries where we were forced to close stores, we applied for selected support measures Provided by governments, so called furlough schemes, to reclaim part of the wages of our store personnel. In this way, we have been able to absorb the estimated €483,000,000 of lost net sales in the 8 weeks of the spring lockdown. We went into the 1st lockdown with €400,000,000,000 of cash and liquidity. This was end of week 11, and it included €300,000,000 of cash and cash equivalents, further enhanced by €100,000,000 of our revolving facility. At the lowest end of period position, which was end of our period 4, this cash headroom was €301,000,000 so approximately €100,000,000 lower.
As you know, our format is highly cash generative, and we have the ability to recoup quickly once circumstances revert to normal. This was helped by the combined effect of the postponed orders, extended payment terms, reduced CapEx and has led to an accelerated recovery of our cash after the store reopenings in week 'twenty. The overall impact of the 2nd lockdown was less than in the spring, and the impact on our cash could be handled relatively easy Without taking measures that were considered prudent in the first lockdown as a reaction to the then unprecedented level of uncertainty. Consequently, we ended the year with a healthy cash position of €590,000,000 And an additional €100,000,000 unused of the revolving facility, which means a total cash and liquidity of €690,000,000 Note that this 53rd week had a negative impact on ending cash. First end of week 52, the cash balance reduced by $38,000,000 primarily as a result of the 5th quarterly interest payment of of €27,000,000 In addition, there were certain employee related payments, mainly salaries, It's normally occurred in the 1st week of the next fiscal years, but were now included in the 2020 cash flow.
Including all of the above, our operating cash flow for the year on a 53 week basis ended at 451,000,000 Versus operating EBITDA of €616,000,000 and therefore, a cash conversion of 73%, which is completely in line with prior years and again demonstrating our strong economic model. Then on Slide 60, we bring together the high level financials as I've covered them per item in the previous slides. Finally, on Slide 61, a few notes on IFRS 16. In 2019, we've implemented IFRS 16. In this presentation, all the financial information is still on what you could call a pre IFRS 16 basis.
We have chosen for this to keep consistency and comparability over the years. Our 2020 annual report will, of course, include IFRS 16, and this slide shows the impact. In the profit and loss statement, our EBITDA is €166,000,000 higher than operating EBITDA, And that is essentially by excluding €202,000,000 of lease costs and including €36,000,000 of adjusting items that mostly relate to nonrecurring costs for long term incentive plans. Further down in the P and L, depreciation increases with €190,000,000 and interest with €19,000,000 And then on the balance sheet. A right of use asset of €758,000,000 And a lease liability of £784,000,000 is added.
In calculating the liability, Our lease term estimate is relatively short. For the stores, that's on average 3.4 years. This reflects our lease contracts that provide us flexibility with short initial terms and renewal options that we Kenny elect to use. If you would calculate additional EBITDA over the lease liability, you would arrive at a 3.9x leverage. So then I come to my summary on Slide 62.
As I said in my introduction, 2020 has been an exceptional year. We've had the impact of the corona pandemic, which was particularly significant in the 1st lockdown in the spring. Nevertheless, Action has ended 2020 with 8.9% sales growth and 12.4 percent EBITDA growth, both on a 52 week basis. And we also had a cash conversion of 73%, in line with our record of prior years. What I consider to be even more telling is our performance in the period in between the 2 lockdowns.
This evidence that we have managed to stop start processes in various countries and our supply chain exceptionally well, And we have maintained our cost control and as a consequence have shown strong operating leverage. And now I want to hand back to Sander to discuss current trade.
Thank you, Joost. Yes. Because this was all about to pass in 2020. And meanwhile, we are already in week 11 of the new year. So let me give you a brief heads up, and I'm first talking about Slide 54.
So Slide 54 is showing by country The current, I would say, status with regards to COVID. So let me give an example. In the Netherlands, we are currently Open between quotes, we have shopping by appointment only. We have to comply that we are not allowed to have We have let's say, we need to comply with the rule 1 customer per 25 square meters. So if the store has 1,000 square meters net selling area, The maximum number of customers is 40.
We are offering click and collect, and we're selling the full range. That's how you should read it. Well, basically, if you take a step back, then the good news is that with the exception of 18 stores in France and currently 2 days in Germany Two stores in Germany, all stores are open. We have 18 stores in Germany and 5 stores in Czech who are selling essentials only. And you can see that in most big markets, we are also offering Click and Collect.
This page is actually changing by the day. So tonight, President Macron is going to make a speech in France, and we actually expect further restrictions in France. To give you a specific example about France, we have 5 72 stores. 18 stores are currently closed, which are pretty big stores. We would normally do almost €2,000,000 of sales on a weekly basis in those 18 stores.
And in France, there are currently 2 geographies. 1 is in the south of France in the Nice area, and 1 is in the northwest of France in the Dunkerque area Where we are confronted with weekend lockdowns. It basically means that we are not allowed to keep our stores open on Saturday Sunday. That's impacting 22 stores. So we're currently missing the Saturday sales already of 40 stores, and we expect more of that to be announced later today by Marc Hall.
But anyway, at a certain point, these lockdowns will be behind us because the vaccination and probably spring weather is going to help us, And that will bring us back into a fully open situation again. So that is the current situation, but this is changing by the day and by the week, and we are really on top of that. Then moving on to Page 54. So we have started the year with negative like for like in P1 and P2, which was driven by a combination of very, very strong like for like in Belgium, France, Luxembourg and Poland, With a minimum year to date like for like of 25%. So the minimum of those 4 countries, 25%, but the 3 other countries are significantly Above 25%.
And then in the Netherlands, Germany and Czech, clearly, we had either no sales or negative like for like in the 1st 2 months. However, in P3, Germany and the Netherlands are significantly improving. This week, actually, we will report positive like for like in all markets except the Czech Republic. And it also means that the like for like for P3 is turning positively. The supply chain NDCs are operating well given the complexities with very good product availability across all markets.
Our store expansion plan is on target. So like Jorg was referring to, we have an ambition to open 300 stores This year across 9 different countries. And so far, so good. We are currently above last year in Q1. So that's also fine.
And then last but not least, cash and liquidity is really important. So our current position is €525,000,000 And there is a seasonal element in there. But also in the most recent weeks, we have actually been able to Expand our cash position. So that also brings us in a very good position for the future. And if that would not be the case, clearly, we would not commit ourselves to such a significant storage pension program.
So Action is in really good shape Given these complex circumstances and with that, I am handing over to Simon, but I think he's going to introduce the brake first. Simon?
Thanks, Sandra. I'm not going to introduce the break just yet. I do want to conclude by saying that it will Take more than 8 months of lockdown interruptions to shift Action off its 2023 plan of €9,000,000,000 of sales and EBITDA of over $1,000,000,000 Indeed, the Action team and Board believe that Action's business model and its potential profitability is even stronger as a result the experience gained during the pandemic. And then I just want to say a bit word about the 3i team. The 3i team that works on Action is highly engaged with the company and has relentlessly pursued a sustainable long term growth agenda for this very special business.
Since the 1st year of our investment in Action, when we bought the company from the founders, we've jealously guarded the original customer centric values of the business as well as bringing an ambitious and long term mindset. We're as excited today about the scale of the growth opportunities for Action as we were 9 years ago. Let me thank you for listening, and what we'd like to do is now move to Q and A. As mentioned earlier, you can type in your questions by clicking on this tab. Alternatively, you will be able to dial into the conference call.
If you choose to dial in to the conference call, please mute your webcast to avoid any feedback issues. We propose we now take a 5 minute break to allow you to dial into the call should you wish to, and we'll reconvene for Q and A in 5 minutes' time. Thank you.
Our first question comes from the line of Hayley Tam from Credit Suisse. Please go ahead.
Thank you very much for taking my questions and for the very comprehensive capital markets that you've given us today. Could I ask 3 questions, please? First of all, could you just quickly tell us what assumptions you've made about further lockdowns or COVID-nineteen impact In terms of your 320 store ambition for this year, just especially given the comments you made around the infection rates And I guess lockdowns in the Czech Republic and Italy? The second question, just in terms of EBITDA margin, obviously, that did expand slightly last Cheah, I just wondered, could you help us think about your expectations for that this year? It sounds like you could benefit from things like self checkout and the supersized stores, But potentially offset by accelerated reaccelerated store rollout plans.
So any guidance you can give us there would be appreciated. And then I guess the final question. You mentioned, I think, that the net debt to EBITDA fraction is now 3.9x on an IFRS 16 basis. I just wonder if that was correct And whether you could help us think about what would be the right level for that going forward?
Okay. Can I Sander, do you want to take maybe take the first one and if Joss deal with the second 2, that's probably the best way to Pick these up?
Yes, we will do that. So my understanding was what will the what do we think about further lockdowns and restrictions, And how is it going to impact our expansion for the rest of the year? That was my understanding. So from an operational perspective, We currently assume that we will still be impacted by COVID till the 1st August, and that is basically based on the statements of the various governments. COVID will not be gone after the 1st August, but we will be impacted by COVID up until, let's say, the middle of the summer Because the vaccination and better weather needs to help us.
However, we believe that as it looks now that, that is not going to impact Our store expansion plan. Yes, there might be a little bit of a delay of, for instance, the opening of our private stores in Italy. It might be a few weeks later, but ultimately, we are confident that we will open private stores in Italy. There might be some delays in some other countries because construction It might be delayed. But as it looks now, we feel pretty comfortable with our ambition to open 300 stores by the end of this year.
It is not a guarantee because COVID is a very tough virus, and it sometimes behaves unexpectedly. But the ambition is 300 plus, and we can we think we can do it with COVID. That's why that's the reason that I also made the example of the Czech Republic. That's the toughest market from a COVID perspective, and still we're going to open 5 stores in the next few months. So that's my reaction to this first one.
I'm handing over to Joost.
Yes. So your second question related To our EBITDA margin, which in the past year came in at 10.9%. And indeed, this was an improvement over the prior year. And your question was, do we expect a further improvement? And I should start by saying, in general, we want to be very careful With an outlook or guidance because of the obvious reason that we're still Experiencing the impact of COVID-nineteen.
Having said that, I think what I've tried to show In my presentation, by singling out the period in between lockdowns Is that we do indeed have a good operating leverage and that we are able To translate that into an increased profitability. So I cannot tell you What this will mean for the full year as it will turn out because of the impact in certain periods, But I can tell you that we are very confident that once the restrictions have been lifted, the recovery will be very strong And that you will also see in the EBITDA margin. So then your 3rd and final question It was about the 3.9% number that I mentioned when I discussed IFRS 16. This was actually not our overall leverage. So this is only the kind of leverage that you get When you calculate the lease adjustment of CHF 202,000,000 over the lease liability of CHF 784,000,000 And that's how you get to the 3.9 that I mentioned.
Having said that, our overall leverage, If you calculate that in accordance with our financing agreement, ended in 2020 at 3.6x. So the SEK3.9 billion for the IFRS adjustment is actually quite close to the SEK3.6 billion where we
ended overall.
Thank you.
Our next question comes from the line of Philip Middleton from Bank of America. Please go ahead. Yes. Thanks very much. And again, very thanks for the presentation, which is very, very eliminating.
A couple of questions. Firstly, You mentioned the EBITDA and your leverage, which is lower than it has At various points, obviously, you won't do a leverage recap with conditions like they are. But how are you thinking about the structure The balance sheet and how might that evolve if and when hopefully we do get out of this because you do seem to have actually been building up cash? And secondly, Do you have any real visibility on how customers will behave and we're sustainably out of this situation? So Do you think in the very strong bounce back period, you saw people were just making up for lost time?
Or do you think that was a more sustainable level of activity once normal life resumes? Thank you.
Okay. Thanks, Philip. Why don't I deal with the recap EBITDA type question, and Sander can talk about his views on customer behavior rolling forward. I think it's pretty clear that we have a track record of this company using refinancings at regular intervals and degearing pretty rapidly after each of those refinancings and those refinancings being used to make distributions to the shareholders. I don't see us moving away from that.
But clearly, we're not going to do anything while we have the unpredictability of the current situation. So We had perhaps talked about a distribution potentially happening in Q2 This calendar year, I think that's unlikely given the level of the virus across Continental Europe, But I do expect us to continue to see us deleveraging. And at the appropriate time, once we're through the worst of this crisis. That subject will be very much back on the agenda. Sander, do you want to do the second question?
Yes. Yes. Well, first of all, what we see in retail, separate from Action, is that COVID is really accelerating trends, Underlying trends which were already there. So customers are becoming more digital. Online is growing, The value segment has been growing in the years ahead of us.
And in that sense, we actually see that this behavior has Accelerated driven by COVID, that's 1. Secondly, we also know that we have structurally a very competitive and distinctive positioning, and we actually believe that Post COVID, we're going to benefit from this from that and also from the circumstances. Customers are really eager once stores are fully reopened To be released, and actually many customers have actually been saving a lot of money. They have not gone on holiday, they have not gone to the restaurants, We've not been able to shop properly, so we can already see with the reaction once we reopen that customers eager to shop. That is kind of one.
Secondly, it could very well be that certain groups will feel pressure On that budget, because of the economic development, those people who are on a budget of the first location to go to is actually a discount store. And thirdly, we believe that our assortment and our pricing is very, very up to date and makes it a very attractive place to shop. So I'm really confident about sales development going forward. What we do see that driven by COVID That's the behavior has changed a little bit. So shopping frequency has come down.
But once a customer is in a store, they are spending significantly more. 10%, 20%, 30%, 40% depends a little bit on the country and the week in terms of incremental spend per customer versus the prior year. So in that sense, shopping behavior has made this kind of a change. But I'm really optimistic, once COVID is kind of behind us or under control, about this. We'll
We'll now take our next question from Oke Nason from Exane BNP Paribas. Please go ahead.
Hi, good morning. It's Luke Mason from Exane BNP. Just three questions, please. Firstly, on Germany. So there have been some good progress in terms of sales per store.
I'm just wondering how you expect this to be Going forward, given kind of the increased brand awareness and like for like you talked about there. And then secondly, just another question on Kind of the pace of store rollout. So just wondering if you're still on track for the 2,750 target by 2023. And aside from COVID, what are kind of the big risks in terms of the store rollout of greater than 300 stores per year? And then just lastly, on the newer regions, still early days, but in Spain, Italy and Czech Republic, can you give Any indication on the potential size of these markets in the long term?
Sander, do you want to take those?
Yes. Simon, I will take the questions. I'm not entirely sure if I fully could hear it rightly, but I will give my answer based on what I think I heard. So the first question was about expansion in Germany and what do we think about The opportunity ahead of us, that was my understanding of the first question.
I think it was really about the development of sales per store in Germany. So do you see that continuing to grow in the way it's accelerated?
Okay. Well, Dan, the answer is simple. So I showed a little graph in the presentation about the average sales per store in recent years in Germany. And I have not shown you the 2 years before, so before 2017, but We've had a few years behind us where the average sales per store came down. And as you could see, in the past 2 years, average sales per store has gone up.
And I expect that trend to continue. Why is that? 1st of all, because like for like is going to help, that's 1. Secondly, Because the quality of our new stores is really starting to contribute as well. And that is because we are, let's say, more selective in our Location process or location search process, but also because we are looking for more stores in, let's say, in urban environments.
So we had a little bit of an overrepresentation in rural stores, but now we also started to open more aggressively stores in Cologne, in Dusseldorf, in Berlin, In Stuttgart in Munich, those stores are bringing higher sales. They are also a little bit more expensive from a rental So we need to find a proper balance. So optimistic about the sales development per store in Germany. Secondly, today, we actually have 1739 stores up and running. And like Simon said, in 2023, We are aiming for 2,750.
So if you do a little bit of math, if you would add Another, let's say, €275,000,000 for the remainder of this year. So that will bring us close to the target of €300,000,000 So then we will cross the 2,000 store mark in Q4. In order to hit the 2,750, We also need to do roughly 300 stores in 2022 and roughly 300 stores in 2023 in 2023. We believe that the combination of the markets which we currently operate in, plus particularly Czech, Italy and Spain, there will be enough supply. So otherwise, we would not reconfirm this ambition for 2,750.
To dive into the market Specifically, in the Czech Republic, I think it was also on one of my slides, 11,000,000 people. We have 10,000,000 people in Belgium, We will soon open store 200 in Belgium. So I feel quite comfortable to state that for the Czech Republic with 11,000,000 people Ethical could open at least 150 stores. That's less than Belgium, so maybe in the long run, it could be even a little bit more, but Czech is also a bigger market with a lower GDP per capita. And then when you look to Spain and Italy, it's too early to give I have a strong feeling for a number because we haven't opened any stores yet, but there are 60,000,000 people living in Italy and there are 43,000,000 people living in Spain.
So if you would make the comparison with some of our other markets, then we believe there is no potential for, let's say, well, 5, 6, 7, 8, 900 stores, I'm giving a pretty big range because we first need to test the temperature of the water with opening our pilots. But so far, in all the markets where we've opened stores, 8 countries so far, customers have reacted very positively. And in all cases, we've been able to outperform, let's say, our opening ambitions. So I believe that those three markets, plus the markets which we have, are going to help us to get to the 2,750, and then we will not be done because there will still be significant opportunities in those markets End of all opportunities for new countries.
Thanks, Anna.
Great. Thank you very much.
Thank you. As there are no further questions. In the phone, I would like to hand over to the questions over the web.
So the first question from the web is, does the larger Excel store concept And does it create more value in terms of sales density or margin?
Sander, do you want to pick that up?
Well, first of all, often when retailers open bigger stores, they also are going to increase the assortment or they're going to add Different departments, and we are not doing that. So we are selling the same range in a by the way, that is already the case today. We are selling the same range In the 1100 square meter store in France as we're doing in an 800 square meter store in France. So also in this 1600 square meter store in France, We're selling the same range with the same prices, the same promo and the same external communication. So from that perspective, It doesn't create any complexity, let's say, in the organization.
In the store, it's actually helping because the reason we're doing this Is that the sales pressure per square meter, the intensity per square meter in certain French stores is so high that it creates complexity both It's not a convenient shopping trip and for the store operators to operate that individual store. But basically, in an Excel store, we basically present more facings of Same article. So in that sense, it's going to help us to operate the store. And from a financial and a contribution perspective, We have not made that evaluation yet. So I already said sales is developing really well at €365,000 for instance, last week.
But also, we are paying more rent. We have a little bit more housing costs. We have a little bit more energy. So the net financial evaluation And also the returns, we still need to, let's do a little bit of that work. But with, let's say, with €360,000 of sales, It's pretty difficult not to create incremental value, so I'm quite optimistic about that.
Thanks, Anna.
Okay. The next question from the web is regarding the app, can you give more detail on its capability and the anticipated
Yes. Well, first of all, I already have the app. I have it well, the audience can't see it, but I have my phone here because we have an internal version, which we're testing amongst employees. And what is the app doing? Well, first of all, it is providing, you could say, a lot of the information which also sits on our website.
It shows what is the assortment which we have. It's up to date. So it also shows new articles which we are launching every week. It shows prices. It shows the weekly promotions.
It shows the geographic locations of our, let's say, of our stores. And it also provides background and company, let's say, information. So these are all, you could say, relatively standard features for an app. So in that sense, we don't have an ambition to deliver the most innovative app. Basically, we want to comply, you could say, with the retail standards in the markets.
The idea is also that if a customer go is in a store that he can also use at a certain point in time, he can use the app To start paying. And by that payment, we are actually also are going to collect more customer data, And that customer data is going to make us much more knowledgeable about the behavior, let's say, of our customers. And we can use that data and that intelligence that's into our commercial decision making. The intention is also, and I did It was being written down on the slides, but I have actually not described it. The intention is also that once the app is live, As we also are going to launch a certain loyalty program.
So basically, if the customer is going to spend more in our store, He can again scan the app. He gets a certain reward, either a point based system or some other rewards. And with That loyalty program, clearly, we want to increase traffic. We also want to increase the basket size. But that is That program is still, I would say, under construction, and we won't launch that at the same point in time.
We would like to launch it a little bit later.
The next question is, could you please give us an update on margin guidance for 2023, which appears increasingly conservative? When will you give updated like for like sales, store and margin guidance beyond 2023? And could you also update on time line thinking around refinancing Action balance sheet?
I mean, do you want to take the first part of that, Sander, and I'll go back to the refinancing point.
Well, I'm not going to be unfortunately, I'm not going to be very specific. So we are currently, let's say, in the second quarter, we're going to update our long term plan, our business Then also, let's say, our financial ambitions beyond 2023. And well, clearly, we do not want to disappoint neither the shareholders nor ourselves. So clearly, we're aiming for more, more sales, more stores, potentially more countries and certainly more EBITDA. But today is not the moment to, let's say, to I think that's kind of my answer for the first question, Simon.
Okay.
Then there's another question, which was partially answered, but it's a bit more color on the Spanish opportunity and
Holden, can I come back to the refinancing, Sylvia? So The thing to understand about Action is once we have some calm water and we're out of this choppiness, You all know that cash builds up in this business very rapidly. And if anything, from the experience of last year, it's probably going to be even more rapid. So We will be very alive to the appropriate time to do a refinancing and to make a distribution. But at the moment, it's just very hard to call when precisely that will be.
But we're not going to sit here with a company with an embarrassment of cash on its balance sheet. That's pretty clear from our past behavior.
Okay.
So as I was saying, the other question is partly answered, but it is about, again, more color on the Spanish And if there are any differences against other markets in terms of structure in Spain?
We are in the process of discovering that. So I we made with the team, including myself, a few trips to Spain in recent years. We also already have a small team on the ground. So we've hired last year a very experienced seasoned Spanish expansion manager. We have seen in the market, clearly, Spain historically has a structure Where the hypermarkets were kind of the first to come, in the past 10, 15 years, supermarkets, particularly Mercadona, Lidl, Aldi have also penetrated and developed, let's say, a national network.
We also know that drugstores is are really kind of absent in, let's say, in Spain or it's a relatively young concept. We know there are do it yourself stores. So that's all kind of known to us. The only thing what is really different in Spain, and we see the same in Italy, It's the existence of the Chinese. So basically, every Spanish town or Spanish neighborhood has a smaller or a bigger Chinese kind of bazaar store, which is operated very often by a Chinese family, and you can buy a lot of general merchandise, non food items In those stores, and that is different.
We have seen the same in Italy. We actually believe that the market Characteristics are, I would say, very suitable for Action. We want to do it step by step. Therefore, we want to start in the Catalonia area. It's a wealthy part of Spain.
I think there are roughly 10,000,000 people living in Greater Catalonia. And one of the reasons why we're working with this concept of pilot stores is that we also want to discover and explore it step by step. So far, nothing strange as what we've seen in Spain. And other than that, it's a year from now before we're going to open the first store. So first, I would like to see how the Italian customer is going to react to the opening of Action.
I think clearly, the geography is quite complicated in Spain, which is why The initial focus will be very much on the northeast of the country, the adjacent part to France.
Correct.
Okay. The next question is, the evidence from consumer businesses that have allowed their margins to too much is that this has allowed competition in. In contrast, Costco in the U. S. Has kept reinvesting marginal gains back into price.
Is there an argument for capping Action's margins and reinvesting its scale advantages into lowering price to increase its barriers to competition over time?
Sander, do you want to take that? It's something we talk about a lot.
Well, actually, this is exactly what we're doing. We are protecting our core margin. So if you would open up the Netherlands And you would look to the underlying gross margin in the Netherlands. That margin has actually been flat in the years behind us, and it's also flat in the years ahead of us. There are only two reasons why our gross margin is going up.
The first reason is because we are expanding the portion The proportion of direct sourcing. So we're sourcing articles directly in the Far East, and we make significant improvements in cost price. A significant portion of that improvement, we are actually reinvesting into quality and lower prices. And a smaller portion of the benefits We are using to basically to invest into the infrastructure of the company to facilitate, let's say, this direct sourcing part. So the gross margin is a little bit enhanced by that.
And the second reason why the gross margin has gone up in the recent years at Action It's that we have a price line by country. So in France, our prices are slightly higher than Belgium. And in Belgium, they're slightly higher than the Netherlands. And in Germany, you're kind of the same as in the Netherlands. So we have a different line per country, and therefore, we will also have slightly different gross margin by country.
And particularly because of the rapid growth of France, that has basically pushed up our margin a little bit, but the underlying gross margin is flat in the years behind us and in the years going forward. Because similar to Costco, we want to reinvest, and we also don't want To create a margin opportunity for an older player to undercut our prices. That's a fundamental belief in our strategy, And it also sits in our DNA.
And it's fair to say that every year, we regularly check Prices against competitors for each of our 14 categories in all countries to ensure that our prices are very competitive with our competitors.
Well, Simon, it's not even every year, it's actually every day. So currently, we have technology. We are scraping the prices of all our, Let's say, relevant competition in all markets. So in this case, technology and digitalization is allowing us to be on top of, let's say, on top of prices, which is also necessary because we operate in 8 markets with different competitive dynamics, And we really want to protect the lowest price in current positioning of Action.
Okay. The next questions are actually probably for Simon because they're on the broader 3i How should we view the performance of your infrastructure assets and scan lines?
Well, we gave an update at the end of January. Essentially, the infrastructure portfolio has probably been the most level and balanced performer across this entire piece, I. E, it's had the least impact from any COVID ups and downs. They will be making a trading statement at 3 IN before the end of the month. And in terms of scan lines, like other travel assets, it's obviously been impacted by lockdowns and closed borders at various times, but it has remained a very cash generative investment for the group.
Then there's another question. Following your portfolio reviews, are you still happy that there is scope to See the valuations of some of the assets hit by the valuation decisions made last year to recover strongly at the full year valuation process this year.
I mean, we've got Julia here. Maybe Julia can make a comment about that.
Yes. I mean, as we talked about We talked around some of the conversations about Q3. We've seen very strong performance in a number of sectors across our portfolio. We've seen the market multiples in those sectors also expand considerably. So as we come into our valuation process, we will be thinking about Is this the moment to actually be able to move a small number of those multiples on, underpinned by the very strong performance that we've seen going through this period?
But obviously, we're about to embark on that process, and we'll be talking about it in detail in May.
I mean the other complication in that process is while we will see at a gross portfolio level perhaps some good movements in the valuations of those various investments. We are going to have a very big foreign exchange headwind in this last quarter. And so in translation terms, that is something that we will obviously face. Clearly, the foreign exchange dealers have a more bullish view about this economy than I do.
Looks like we have no further questions. Okay.
All right. Well, thank you, everyone, and thank you to Sanddart and Joost for taking the time. I hope you found The briefing and the presentation helpful?
Thank you.