Deep Dive Dino Polska - Quality Compounding at 45% per Year

You might be too late to invest in Walmart. But you're not too late to invest in Dino Polska...

Content:

• 4-Point Summary

• Dino Polska Business

  • Business Model

    • Competitive Advantages

      • Standardized Stores

      • Real Estate

      • Agro-Rydzyna

  • Main Competitor: Biedronka

  • Financials

  • Total Addressable Market

• Poland Macroeconomics

  • Polish (Retail) Market

  • Risks

    • Short-Term

    • Long-Term

• Valuation

• Conclusion / Investment Decision

4-Point Summary:

• Dino Polska is a simple business with an outstanding performance of +43% CAGR over the last decade and much more room for growth.

• High returns on invested capital (ROIC) and Equity (ROE).

• The founder is still on the board, owns 51% of the shares, and is a long-term thinker.

• Despite being a retailer, Dino’s standardized store format, cost structure, and economies of scale qualify as strong competitive advantages.

Dino Polska’s Business Model

Dino Polska is a Polish grocery store/retailer founded in 1999 by Tomasz Biernacki, focusing on the rural areas of Poland (Definition of rural: 2500 people living in a 2km (1.24 mile) radius). Since then, it has evolved into Poland’s fastest-growing grocer and one of the best-performing retailers in the world.

Because of the focus on rural areas, Dino has less competition than retailers in the city. Walmart started the same. They didn’t compete for the obvious market in the cities. They began with places where they knew their stores would be successful and expanded from there.

Many stores in rural areas have limited offerings and cannot satisfy the customer needs as larger stores in the cities. Dino is the store that is filling that spot.

The stores offer about 5,000 stock-keeping units (SKUs). Close to 90% of those products are grocery products (fresh food 40.3%, non-fresh food 48.3%), and the rest are non-food products (11.4%).

Competitive Advantages