Grigeo Group's margins continued to decline in the first quarter of 2026, resulting in an opposite profit trend despite revenue growth.

Revenue in the first quarter of 2026 was 31% higher than a year ago, reaching €77.5M. As expected following the acquisition of the company, revenue in the paper segment increased by 61%. Although revenue in the wood fibre boards segment also grew (+9% YoY), the raw material for corrugated cardboard and related production segment moved in the opposite direction, with revenue declining by 11% YoY.

Results by segments, 2026 Q1

All of the company's segments faced profitability challenges this year. In the paper segment, gross profit increased, but due to a contraction in margin, its growth rate was almost half the pace of revenue growth, reaching 29% YoY. Meanwhile, gross profit in the other segments declined. Overall, gross profit increased, but at a significantly slower pace than revenue — only 8% YoY.

Q1 gross margin

In the first quarter of 2026, administrative expenses grew broadly in line with revenue, rising by 33% YoY. However, additional pressure on margins came from selling and distribution expenses, which were 46% higher than a year ago. As a result, profitability declined — EBITDA fell by 21% YoY, while operating profit contracted even more sharply, decreasing by 47% YoY to €2.4M.

Operating profit

Free cash flow remained negative both for the first quarter and on a trailing twelve-month basis. This quarter, funds from operations declined by 29% YoY to €5.1M, while high investments in long-term assets nearly doubled that amount, reaching €10.4M.

Free cash flow

Valuation metrics moved higher: P/E increased to 9.7x and EV/EBITDA to 4.9x, although the latter remains relatively low.