Progroup Back on board

Research evidence excerpt

J P M O R G A N

Europe Credit Research

19 August 2026

Overweight

Progroup

PROGRP

Back on board

Progroup (PROGRP, Ba3/BB-) reported Q2 2026 results that were broadly in line

with our expectations, with EBITDA up 4% YoY due primarily to solid demand for

corrugated board. Net leverage was stable QoQ at 4.3x at the end of June, but is a

full turn lower than a year ago. Management remain cautiously optimistic on an

earnings recovery, supported by the continued ramp-up of recent growth projects

and a modest recovery in prices. We continue to expect another year of solid cash

generation, helped by lower capex, as well as further progress towards the group’s

3.0x net leverage target. We remain OW on the credit, with the €31s trading at 4.4%

YTW.

In-line Q2 2026 results. EBITDA increased 4% YoY to ~€39m, driven

primarily by higher corrugated board volumes (+10% YoY) more than

offsetting a decline in average selling prices. FCF was modestly negative, at

-€7m, but this was entirely due to a small increase in net working capital, as well

as seasonally high cash interest.

Stable leverage. Net debt increased marginally to €804m at quarter-end, up

€7m QoQ, due to negative FCF during the quarter. However, net leverage

remained stable QoQ at 4.3x thanks to higher earnings. Liquidity remains solid

at €236m including €36m in gross cash and a fully undrawn €200m RCF (but

excluding around €80m of factoring facilities), with the RCF extended to July

2030.

Expect continued recovery. Management remain cautious given price

volatility, but we note the sequential improvement in containerboard and

corrugated board prices during the quarter after a weak Q1. The PPO2 plant is

contributing positively to earnings and the PW16 plant continues to ramp up

in Italy, supporting the medium-term earnings outlook. Moreover, lower capex

after the completion of major growth projects should support FCF generation

and a continued progress towards the 3.0x net leverage target.

Remain OW. While net leverage remains high, we expect a continued earnings

recovery in the coming quarters. With the company generating healthy FCF,

helped by a fall in capex, we forecast net leverage will decline further towards

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