Dino Polska S.A. (AO) | Reduce | 1Q26 results: EBITDA beat on better-than-feared gross margin

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Dino Polska S.A. (AO) | Reduce | 1Q26 results: EBITDA beat on better-than-feared gross margin

12.7% space growth and slightly better-than-expected LFL sales growth, which accelerated to

4.4% from 3.7% in 4Q25 and 0.5% in 1Q25. Dino indicated that grocery price deflation on its shelves remained a drag, with price

deflation in fresh products exceeding 3%, while earlier Easter supported consumer activity in late March.

Gross margin declined 33bps YoY to 24.0%, which still came in above our and Bloomberg estimates of 23.4-23.5%. Management

pointed to lower raw material prices at Agro-Rydzyna, while we think meat-price pressure was also less adverse than in 4Q25, as

pork procurement prices bottomed in January and then partly recovered. Better purchasing terms may have also helped while

we do not assume easing price competition on the market.

Cash opex was broadly in line but with mixed effects. Employee benefit costs rose 12.6% YoY, below revenue growth, helped by

lower employees per store (-2.6% YoY) and lower-than-expected average staff cost inflation (+1.5%). This was offset by other opex

pressure, with Dino pointing to weather-related costs, including snow removal and electricity, while we think higher fuel prices

may also have affected logistics costs.

Operating cash flow improved to PLN95m from PLN7m in 1Q25, helped by a smaller working-capital outflow, while capex

declined to PLN410m from PLN516m. Net debt stood at PLN155m, implying ND/EBITDA of 0.1x.

Outlook and what next

Management reiterated 2026 rollout and capex guidance, with new store openings expected to grow by a teen percentage and

capex at c. PLN2.5bn, including logistics, Agro-Rydzyna expansion and reverse vending machines. Key factors for the coming