Good morning, and thank you for joining us today for this online review of 3i's performance during the financial year ending the 31st of March 2020. My name is Simon Thompson, and I'm the chairman of 3i. As I'm sure you're all well aware, we were unable to hold our AGM in person this year because of the measures currently in place to reduce the transmission of COVID-19. Instead, the formal AGM was held earlier today with the minimum quorum of shareholders present for the sole purpose of opening the poll on the proposed resolutions so that our shareholders' proxy votes could be properly registered. No other matters were discussed, and no other business was conducted. The results of the resolutions will be posted on our website later on today. Notwithstanding these unusual circumstances, engaging with all our shareholders is very important to us.
Through this webcast presentation today, we hope to update you on our performance over the past year and provide you with an opportunity to ask questions as usual. I'm joined on the call by Simon Borrows, our Chief Executive, and by Kevin Dunn, Group General Counsel and Company Secretary. As usual, I'm going to make some introductory remarks before handing over to Simon for a review of 3i's performance in the year to 31st of March 2020, and we will then open the Q&A session. We have already received a couple of questions by email, and you can send us a question at any time during the presentation via the webcast using the questions tab at the top left-hand corner of your screen, and we will address all the questions that we receive after Simon's presentation.
Let's start with a quick overview of our performance during the last financial year. The portfolio performed strongly for the first 11 months of the year, supporting good NAV growth, as shown in the third quarter valuation as at December 2020. At that point, 3i was on track to deliver returns for the 2020 financial year in line with our objectives, despite some evidence of slowing growth across a number of major economies. As we reach the end of financial year 2020, the outbreak of COVID-19 pandemic and the lockdowns and social distancing measures imposed to mitigate its spread had a dramatic impact on economic activity. Despite record levels of fiscal and monetary stimulus being deployed by governments and central banks in support of businesses and the broader economy, we've seen a sharp contraction in numerous sectors and geographies.
Across our diverse portfolio of private equity and infrastructure assets, we have experienced a range of impacts of the pandemic. Some of our businesses providing essential goods and services have seen their revenues increase, while others have suffered significant reductions in revenue. I'm pleased to say that only a few have needed or are likely to need any form of liquidity support from 3i. In managing through this crisis, we've been guided by three priorities. Firstly, to protect the safety and well-being of our employees and contractors while maintaining business continuity. Secondly, to maintain 3i's strong balance sheet and liquidity. Thirdly, to work with our portfolio companies to manage the operational and financial consequences of the pandemic, including ensuring that their employees are healthy and safe while managing liquidity, supply chain, and other issues.
3i has performed well against each of these priorities. I'm very proud of the response of the team to this unprecedented challenge. As Simon will report shortly, our employees and contractors have been kept safe through effective remote working. We have maintained and even enhanced our balance sheet strength. Our portfolio companies have, on the whole, performed well against the revised forecasts and priorities that were set following the outbreak of the pandemic. The valuation of our portfolio as at the 31st of March 2020 was one of the most complex in the history of the group. It had to take into account both the impact of the pandemic on the financial forecast for each of our portfolio companies and changes to the multiples and discount rates applicable to comparable companies in the capital markets.
Following completion of the valuation, 3i's total return for the year to 31st March 2020 was GBP 253 million, representing a return on opening shareholders' funds of 3%. That compares to a return of 18% in the previous year. The closing net asset value as at 31st March decreased to GBP 8.04 per share from GBP 8.15 the previous year, after the payment of GBP 0.375 of dividends during the year. This resilient performance reflects both the diversity of the portfolio and the defensive nature of many of the individual companies. It also reflects our consistent policy over many years of adopting long-term through the cycle multiples and discount rates to mitigate the impact of market volatility on portfolio valuations.
I do not plan to comment on each of the numbers on this slide, but I do want to draw your attention to the resilience of 3i today compared with the situation 12 years ago during the global financial crisis. Today, we have a much smaller, more focused portfolio and clear visibility of the operational and financial challenges faced by each of our portfolio companies. As a result, we've been able to help them manage through the crisis and provide financial support where necessary. The 3i Group is also in a much stronger financial position. We cover all our operating costs with income and have not been forced to sell assets to pay the bills. We have a much stronger balance sheet with net cash of GBP 270 million at year-end, and a revolving credit facility of GBP 400 million, which remains undrawn.
Since year-end, we have further increased our financial resilience with the successful issue of a GBP 400 million 20-year bond. While maintaining our gross debt below GBP 1 billion, this new bond provides long-term, low-cost funding should we ever require it in the current highly uncertain environment. Our policy is to maintain or grow the dividend year- on- year, subject to the strength of the balance sheet and the outlook for investment and realization levels. We are aware that some boards have decided to prioritize cash over shareholder distributions, and in some instances, regulators have intervened to prevent dividend payments. Nevertheless, we took the decision to recommend an unchanged dividend of GBP 0.35 per share for the 2020 financial year. We recognize the importance of the dividend to our private and institutional shareholders, and as I've just outlined, 3i continues to benefit from its longstanding conservative balance sheet strategy.
In addition, we continue to pay all our employees, support our contractor workforce, and have the financial flexibility to provide liquidity support to our portfolio companies if required, as well as making new investments if attractive opportunities arise. In accordance with this decision, the second dividend for the financial year 2020 will be GBP 0.175, which will be paid in July. Before handing over to Simon, I would like to confirm that all the resolutions were approved by over 90% of the votes at the AGM held earlier today. We are, of course, very happy to answer any questions you may have on the resolutions in the Q&A session later on. I would also like to thank EY, who today will be replaced by KPMG as auditors of 3i.
EY and their predecessor firms have acted as auditors of 3i since 1973, so this is the end of an era. With that, let me hand over to Simon for his review of the year.
Good morning, everyone, and welcome to our shareholder presentation. I'm Simon Borrows, the CEO of 3i Group, and I'd like to start by acknowledging the unprecedented situation we find ourselves in. The world has truly been turned upside down by this global health and economic crisis. Our way of life has changed very abruptly and the social and economic costs are considerable, and they go way beyond anything I've seen since I first embarked on a career in finance in the early 1980s. I hope you've all acclimatized well to being at home more. I'm sure you share with me a sincere respect for all those folks working in our hospitals and care homes, as well as all the other frontline staff keeping the lights on and the country fair.
At 3i, we've been very focused on the health and wellbeing of our staff and of everybody working in our portfolio companies. Our entire organization has moved seamlessly to working remotely and dealing with the significant workload associated with our year-end processes, as well as from working with our portfolio through this period of disruption. I've been keen to encourage a business as usual approach, and our team has responded very effectively. Our main priority is to focus on managing our existing portfolio, and we do this from a strong base, given our prudent management of the balance sheet and good liquidity. While we don't expect this to be a big year for investment or realizations, we don't see any reason to change our through-the-cycle return objectives or dividend policy. Okay, let's take a look at FY 2020.
Once again, all of our teams performed very well, delivering a good portfolio performance across private equity, infrastructure, and in Scandlines. We had a very busy transaction year, with 13 bolt-on acquisitions in private equity, good level of investment and realization activity in both divisions, and the successful completion of the sale of Eurofund V's holding in Action. We made a cash operating profit of GBP 40 million, paid GBP 360 million of dividends, and finished the year in net cash position of GBP 270 million. At 3i, we always spend the first two weeks of March going through all of the private equity and infrastructure portfolio companies as part of our regular deep dive portfolio reviews. This year, we had also asked the investment teams to put each company through a COVID-19 filter and to reset forecasts and cash flows for any pandemic effect.
These meetings bring all the senior partners in private equity and infrastructure together with the investment committee. We use this forum to take key decisions on each of our portfolio companies around strategy, management, operations, and M&A or exits. This time, we set a new emphasis on the rebasing of forecasts under various lockdown assumptions, as well as the production of a detailed liquidity analysis for each company. We're now monitoring this forecast on a weekly basis for some companies, and a monthly basis for others. We do start with a strong balance sheet and good quality real-time portfolio information. We don't have lots of property or any planes or cruise ships. We're not owners of any carbon energy assets, and we have avoided the leisure and hospitality sector. Yes, we do have some travel exposure through our capitalized assets in Audley and ICE.
We also have several retailers where shops were temporarily closed in Europe during the lockdowns, as well as a stake in Basic-Fit and some auto exposure through Formel D and a division of Q Holding. We've tended to be at the more conservative end of the spectrum in terms of portfolio company leverage, all of our companies have been acquired at sensible prices with senior debt only and covenant-lite banking arrangements. In many cases, our companies have grown materially under our ownership, both organically and through bolt-on M&A activity. Okay, let's move to some specifics, and I'll start with Action. As you know, we completed the sale of the Eurofund V stake in January at an enterprise value of €10.25 billion, representing a money multiple of over 31x and a 73% IRR on the original investment value.
We took the opportunity to recycle some of the GBP 1 billion plus of cash distributions we have received from Action over the last nine years to increase our stake with an investment of GBP 591 million. That new investment now gives us 52.6% equity interest or 46.2% net of our ongoing carry liability. Together with our new co-investment partners, 3i now controls over 80% of the Action equity share capital. We did this off the back of a very strong 2019 for Action, which included a recovery in supply chain performance and delivered sector leading growth across all the key indicators, new store expansions, sales, profits, cash flow and returns on capital invested. For Action, the lockdown measures have varied between countries. Holland, all Action stores have remained open, successfully selling the full catalog with special social distancing measures in place.
Been a similar position in Poland, with just 10 stores and shopping centers closed for a period. The overwhelming majority of German stores were reopened in early May, and the Austrian stores have been open since the second of May. The Belgium and most French stores were completely closed until the 11th of May. All the distribution centers have now reopened, so the Action machine is pretty much back to where it was in mid-March before the lockdowns were implemented, but with appropriate social distancing measures in place to keep the staff and the customers safe. As I said earlier, sales for Action going into the COVID-19 lockdowns were very strong across the group, with like for likes of over 7% year to date to mid-March.
Sales from the Dutch stores have been strong since the start of the year and are currently running at over 8% like for likes for the year- to- date. That's a very strong performance from our most mature and second biggest market. The normal assumptions for Holland in our five-year plan are between 2.5%-3% for like for likes. Trading since mid-March in Holland has changed in makeup, if not materially in overall numbers. Social distancing has limited customers in stores, but customers are spending much more after waiting to come in. The enforced drop in footfall has been more than compensated by basket size. We're seeing the same picture in our other countries that have now been reopened for a number of weeks.
Basket sizes are materially up in Germany and Poland without any material drop in footfall, that's giving very strong sales and like for likes after reopening with the full catalog. The composition of the baskets has also changed, with stronger categories now being more seasonal goods from DIY and decoration, while essentials are being purchased in more regular amounts. We don't have enough data to determine what is behind these strong sales numbers, but we can speculate. We're certainly benefiting from the stay-at-home lifestyle. It may well be that people are making fewer but focused shopping trips. We also note our essential categories are very well stocked and very well priced. Here I'm talking about things like soaps, detergents, and hand sanitizers. This has become better understood by consumers as we have moved through the crisis.
A wide range of categories are also finding favor as we move into summer, and good value has never been more important for the consumer. Action finished its Q1 ahead of 2019 on both sales and EBITDA, even with the stores being closed in six out of seven of our markets for the last two weeks in March. It had delivered a very strong first 11 weeks of the year before the lockdowns took effect. Action's April or P4 sales came in at just 41% of last year, reflecting extensive store closures in the month. Sales have recovered markedly since early May, as first Germany and Poland fully reopened, followed by Austria, France and Belgium.
Like-for-likes have been very strong across the entire range in all geographies as the stores have reopened. It is too early to say how Q2 will end, but P5 or May finished strongly and like-for-likes for the group have been running at mid-teen levels since the 11th of May, when all stores had reopened compared to last year. These like-for-like numbers are some 4x higher than we planned in the Action budget for this period. We have pulled back the store opening target for 2020 to 152, which slows growth in store numbers, but builds cash at the end of the year. Cash remains significant at Action, and has already reached EUR 500 million, which is ahead of our plan. This is driven by strong sales since stores reopening.
We will incur more costs and some sales restrictions because of social distancing measures this year, but we are still working through the detail of how that will turn out in each country. We're also preparing for the real risk of a second peak of infections at some point and have asked management to maintain a minimum EUR 500 million cash position going forward. I'd like to say a little about valuation. If it were not for the pandemic, we would be marking Action's value up again to reflect the strong Q1 performance. While nothing has really changed in the strength of the business model or in the white space opportunity, earnings will be hit in Q2 this year, and there is still uncertainty about the longer-term consequences of the pandemic.
Putting that all together, we have decided to bring the Action enterprise value back EUR 10.25 billion, the Eurofund V transaction value. We will keep it at that level until we have more clarity on the Q2 outturn and the balance of the year. Action's valuation at that level triangulates well with the peer group and is also supported by DCF modeling. As I said earlier, we came into the COVID-19 crisis in a very good position. We have a stable portfolio with a good degree of earnings momentum. 93% of our PE companies by value growing earnings last year. In particular, we saw good growth from our consumers and healthcare sectors, as well as good bolt-on activity for our platform assets. Our main concerns up to February remain focused on the automotive sector and some general industrial weakness.
COVID-19 added to that by introducing temporary lockdown problems in a number of our retail assets in particular, as well as having a more prolonged impact on our two travel companies. Conversely, we have seen a marked uptick in performance in certain sectors, including health and personal care, as well as B2B services. We've also seen an uptick in online retail. We're also seeing a rapid recovery in retail sales as our companies come out of lockdown, as I described with Action. That different effect across our portfolio has to be reflected in how we have valued assets at the 31st of March. We varied our approach depending on the extent of the COVID-19 impact.
In broad terms, when we look at our GBP 8 billion of proprietary capital, we have about a third of our assets in low COVID-19 impact bucket, about 60%, including Action, in the medium bucket, and about 7% in the high impact bucket. This has not been a big year for realizations, we did have some good ones, including the disposal of another tranche of Basic-Fit shares in December, as well as a very good sale of Aspen Pumps at a 99% premium to its valuation last March. Both these assets are in our 13-16 vintage. We also completed the sale of ACR. This was a tricky legacy investment of a minority shareholding in a Singapore-based reinsurer. Our PE team did a brilliant job in persevering with this process, lining up all the shareholders for this sale.
We've continued with our disciplined approach to new investment, making three new acquisitions this year. All these assets have performed well through the first weeks of the COVID-19 crisis. I would like to highlight the bioprocessing business, which originated out of Q Holding and two new acquisitions. We have yet to finalize a name for the group, but it is trading strongly and we have further acquisitions in our sights. We have an extensive list of bolt-on acquisitions this year, as you can see here. The majority of these acquisitions were made from portfolio company cash resources and were executed at what we consider to have been attractive multiples. Once again, Phil White and his infrastructure team produced another outstanding performance. Their 3i portfolio has hardly missed a beat over COVID-19. They have made some excellent investments and realizations over the year.
Infrastructure contributed some GBP 80 million of cash income to the Group. Scandlines was another strong contributor to 3i's cash flow this year, and although its tourist car traffic has been hit very hard by the lockdown situation in Denmark, freight flows have remained strong, demonstrate Scandlines' strategic importance to trade between continental Europe and Scandinavia. We've taken the valuation down at Scandlines to reflect the short-term impact of COVID-19 and a higher level of uncertainty. Fundamentally, we think once border restrictions are fully lifted, that the business will continue to perform for 3i. Apart from having a resilient investment portfolio, we have a simple and strong balance sheet with very little gearing and good levels of liquidity. We have no financial covenants in our RCF or bonds, and we have no material fund outstanding commitments.
That means we face these uncertain times in a completely different position to the last crisis in 2008. In drawing to a close, I'd just like to make a few comments. First, our strategy at 3i is focused on thoughtful, growth-orientated investment, cautious use of leverage, good governance, and strong and active asset management. Second, our main focus will remain on managing our portfolio and continuing to add to our platform assets through selective M&A. As I said right at the start, it's bound to be a quieter year for new investment and realizations. On realizations, we've already signed two disposals, and on investments, we don't rule anything out. We do need to have a clearer view of the outlook before we would commit to a major new investment.
We will maintain our prudent approach to cash and provide support to those companies that need it, whether that be for liquidity or bolt-ons. It's still early days in terms of how COVID-19 plays out, but as things stand today, our current base forecasts suggest a very small number of our portfolio companies will require further financial support from 3i Group, which we are well-placed to provide when needed. While performance in FY 2021 will almost certainly be negatively affected by COVID-19, let me remind you of the benefits of the 3i model. We're a selective investor in great private companies with good growth strategies, and we don't need to buy each vintage simply to put the fund money to work. We use proprietary capital, which means we can run companies for longer to maximize value, and we are under no pressure to sell if circumstances aren't suitable.
Where we have real winners, as with Action, we will hold onto them and help them compound value and cash for shareholders. Over the medium term, we have the ability to reshape our portfolio as the market shifts, as we have done over the last eight years. These strengths give us the confidence to stick with our through-the-cycle return objectives and our dividend policy. Thank you, and I'll now hand back to the chairman.
Good. Thank you, Simon. We'll now answer any questions that you may have. We do have some email questions, but as I said earlier, you can also ask a question now by using the Questions tab at the top left-hand corner of your screen. Perhaps we could take the first question.
Chairman, while we're waiting to see if there are any questions submitted live through the web page, we have a number of questions from shareholders that were submitted in advance. The first question was submitted by a private shareholder, and the question is: how are Action and Scandlines holding up to the consequences of the COVID-19 pandemic?
Thanks, Kevin. That's one for you, Simon, I think.
Thanks, chairman. As I said in my presentation, the picture is pretty encouraging for both assets. In terms of Action, it has recovered very quickly from the temporary closures that it faced at the end of March and primarily in April. All countries are trading very strongly. All categories are trading very strongly. Cash flow is very strong. We ourselves are looking at a much better outturn for this year than we might have been looking at in March when we first encountered the lockdowns we saw. The like for likes at a mid-teens level, I will say just once again, are 4 x what we expected them to be for the past six weeks. They're sustaining, and it's very encouraging that in some countries we're seeing higher footfall as well as higher basket size as well.
Scandlines, they've been significantly affected by the border closures up at Denmark and in Germany. Freight continued throughout the lockdown period and continued at close to budget levels. We have had the opening of the border now between Germany and Denmark. We don't have the opening of the border yet between Denmark and Sweden. Again, we're seeing a pickup in car traffic as a result of the German-Danish border opening. We would anticipate that those people contemplating a holiday, if they're not contemplating a staycation in Scandinavia, will certainly be thinking hard about using the cars and using ferries as opposed to flying south. We're pretty confident both of these businesses will make a strong recovery from the temporary interruptions they've faced.
Good. Thanks, Simon. Kevin, can we have another question?
Yes, we do. Another question that was submitted in advance, again from a private shareholder. The question is: how do you manage portfolio concentration risk given the increasing weight of Action versus the rest of the portfolio in private equity?
Again, Simon, why don't you take that one in the first instance?
Thank you, Chairman. If you return to the strategy reorganization that we executed in 2012, we basically decided to rationalize the portfolio and the investment processes. Shrink what at the time was a portfolio of over 130 names and to target about 30 investments spread over four sectors and two geographies, being North America and Northern Europe, and coming out of all the other geographies. Our view was with 30 investments spread over those geographies, that would still give us a very good spread of investments over those four sectors. We would also look for opportunities to hold assets for longer. Action is really the first such candidate that we identified that was suitable for that purpose. Action has already paid back many times our original investment in the company through multiple cash distributions.
It is a fantastically attractive retail asset, focused in the very important value sector, and its stores unusually work in every country we've taken it to. We essentially bought a Dutch business when we first invested in it, but it now operates across seven countries, and later this year will move into an eighth country. Given that geography, and given the fact that the stores perform equally well across all geographies it's entered, we have significant white space opportunity in Europe. We probably have over 6,000 store opportunities in Europe, compared to the just below 1,600 stores we have today. The store rollout group creates enormous economic value because Action delivers on average 100% return in the first year from each store it opens on the capital invested.
Being able to grow the store base in this way and then see those stores give that return in the first year and grow on a very respectable like-for-like basis thereafter, compounds very considerable value for 3i and for its shareholders. We can see ourselves holding this investment for a good while yet, balanced against the 32 growing investments we have in the balance of the portfolio. A lot of the cash that will come off Action will be used to support those other investments. That's really the strategy and the balance that we find ourselves with today.
Just to add to that from a board perspective, we do have rules governing concentration risk when we make an investment, but those do not prevent us from holding exceptional assets like Action, which obviously has grown extremely rapidly over the years and become a very significant proportion of the portfolio. As you would expect from such a large investment, this is an area that the board monitors very closely. We continue to think that Action has the potential to create significant value for 3i's shareholders. I t is one of the great strengths of 3i's proprietary capital model that it does enable us to hold these exceptional assets like Action over the long term. Kevin, can we take the next question?
Yes. The final question we had submitted in advance was again from a private shareholder, the question is this: Has the outlook for new investments improved given the market volatility resulting from COVID-19?
Simon, that's a good question. Why don't you take that one?
Yes. Thanks, Chairman. Not necessarily, I would say at the moment. It depends what type of situation you're looking at. A lot of companies that were up for sale heading into the pandemic have been taken off the market because the pandemic's obviously impacted, A, on the capital markets and, B, on the sectors that those companies came up in. There are some other situations where there is stress in the situation and capital needs to raise, which are still continuing. There are also situations where, as we announced at the beginning of this week, we made a bolt-on acquisition for Evernex, where we were fully engaged prior to the lockdowns coming about.
Through our remote working access and through the easing up of restrictions over the last weeks in particular, we've been able to close on a bolt-on acquisition, which we studied extensively, and we knew the relevant people very well. We're also engaged in a number of other of those situations, and I'm sure we'll be announcing those relatively quickly. I would say the environment is good for that type of transaction, where we have good knowledge of the people and the company already, and we can use the opportunities to meet and do our due diligence. Much harder at the moment to contemplate a big brand-new acquisition. We are moving to that as continental Europe, which is somewhere ahead of the U.K. in terms of lockdown easing, is opening up further.
Thanks, Simon. Kevin, are there any other questions?
Thank you, Chairman. No, we've had no other questions submitted. There is a slight lag, but I just asked the question again a few seconds ago, and there don't appear to be any more questions being submitted.
Okay. Well, in that case, if there are no further questions, I will bring this webcast to a conclusion. Thank you all very much for taking part and for your continued support of 3i.