Q1 results confirm the positive margin trajectory; BUY

Customers: quality over quantity. Active customers declined 4.8% yoy to 7.2 million, but order frequency rose 1.9% and average order value increased 5.2%. This is a familiar and healthy pattern as GFG is shedding low-value shoppers while its engaged base spends more per visit. The KPI mix is consistent with a maturing marketplace model where marketplace take-rates and platform services increasingly drive economics, rather than sheer volume.

Gross margin expansion continues. At 46.5% in Q1, gross margin is up meaningfully yoy and above the FY24 level of 44.9%. This reflects the ongoing mix shift toward asset-light marketplace (which reached 42% of NMV at end-Q1 2026), reduced discounting, and a leaner inventory profile. With the marketplace share likely to continue growing through 2026, further gross margin improvement is structurally embedded, in our view.

Regional divergence persists. In Q1, ANZ remains the growth engine, delivering +3.5% cc NMV growth with active customers up 3.7% yoy to 2.0m. LATAM (NMV -4.3% cc) was impacted by a weaker consumer sentiment in the regions key market, Brazil. SEA continues to be the drag, with NMV down 12.3% cc and active customers falling 15.1% to 1.8m, still the most challenged part of the portfolio, though the rate of decline continues to gradually ease. Importantly, GFG has already implemented several measures (e.g. streamlined product and brand assortment, increased marketplace and service revenues and sharpened customer proposition), which should allow the region to return to profitable growth within the next one to two years.

Management reaffirmed its FY26 guidance for cc NMV growth in the range of -4% to +4% yoy (eNuW: 0.8%) and adjusted EBITDA of € 15-25m (eNuW: € 19m). The guidance had been set with an explicit acknowledgement of softer H1 trading, meaning Q1 has come in as expected. A materially positive H2 remains the base case and is unaffected by today’s release.

Thesis intact, re-rating catalysts in sight. The investment case of GFG is based on three pillars: (1) a structural margin improvement driven by marketplace mix shift and cost rightsizing, (2) a return to top-line growth creating operating leverage and (3) a achieving positive NFCF. Importantly, all three pillars are already in motion; FY25 was the first year with positive adj. EBITDA, cash burn was significantly decreased and growth has returned in two out of three regions.

With € 86m in net cash and a negative enterprise value, the market continues to price in an outcome that the operational data simply does not support. We hence confirm our BUY rating with an unchanged € 1.00 PT based on DCF.