Q1 preview: Strong start supports FY26/27 outlook

VERBIO is set for a strong start to FY26/27, with Q1'26/27 EBITDA expected to quadruple yoy to € 61.5m (eNuW), supported by stronger European biodiesel and ethanol spreads, higher utilisation as Nevada continues to ramp up, and significantly higher German GHG quota prices. Nevertheless, EBITDA is seen c. 11% below Q4’25/26, adjusted for the € 19m reversal of GHG quota inventory impairments. This mainly reflects normalising European ethanol spreads (eNuW: c. € 230/t vs c. € 380/t in Q4). While GHG quota market prices have continued to rise qoq, we expect a higher share of deliveries under fixed-price bilateral contracts rather than spot sales, keeping realised prices broadly stable qoq.

Biodiesel EBITDA is expected to increase 60% yoy to € 36.1m, with broadly equal contributions to growth from higher market spreads (+70% yoy to € 184/t, eNuW) and higher GHG quota prices (eNuW: € 430/t CO₂, up c. € 280/t yoy). Biodiesel spreads have recovered sharply after approaching break-even in April–June, when vegetable oil prices initially reacted more strongly than biodiesel prices to expectations of higher renewable fuel demand following regulatory changes in Europe and the US (Germany’s RED III implementation and higher US renewable fuel blending obligations for 2026–27 under the RFS). Market spreads are expected to improve further sequentially in Q2 to above € 250/t (eNuW), although the timing of feedstock purchases and biodiesel sales may affect realised margins.

Bioethanol/Biomethane EBITDA is seen improving by c. € 35m yoy to € 25.8m, primarily driven by higher GHG quota prices (c. € 30m contribution to yoy growth, eNuW), alongside slightly stronger market spreads and increasing biomethane volumes in Nevada. Against Q4, EBITDA is expected to decline c. 28%, excluding the inventory impairment reversal, mainly reflecting the aforementioned normalisation of European ethanol spreads. Other activities and consolidation are expected to contribute € -0.4m to group EBITDA.

Net income is expected to recover to € 25.0m (eNuW, vs € -4m in Q1’25/26), assuming an effective tax rate of c. 43%, elevated by US losses for which no tax benefit is recognised. Improving US profitability should gradually lower the group’s effective tax rate over the course of FY26/27.

The anticipated strong start to the year underpins our FY26/27 estimates, with upside potential from higher-than-assumed GHG quota prices or a prolonged period of elevated biodiesel spreads. Beyond the current year, the recent CMD reinforced our investment case, highlighting illustrative mid-cycle EBITDA of c. € 300m, progress in renewable chemicals and additional upside from US tax incentives. Lower capex and the planned monetisation of accumulated GHG quotas (eNuW: € 220m in cash proceeds) should further support cash generation. We reiterate BUY and our € 41 price target, based on the average FY27/28-FY28/29 FCF yield. -Q1 estimates table on next page-