BREAKING NEWS – 11.03.2025

In its press release dated March 5th, 2025, Green Oleo SpA, one of the leading European producers of fine oleochemicals from renewable sources, announced the approval of certain management KPIs for the fiscal year ended December 31st, 2024, which have not been subject to financial audit. Specifically, in 2024, the value of production stood at € 72.10 mln (€ 37.50 mln as of June 30th, 2024), marking a 15.0% increase compared to the € 62.60 mln recorded in 2023. This growth aligns with the Company’s strategy aimed at increasing production volumes and generating economies of scale. The incidence of raw material costs in 2024 was 68.5%, improving from 72.9% in the previous fiscal year and 67.7% in the first half of 2024. This improvement is closely linked to the introduction, at the end of 2023, of a new quarterly sales forecasting system, which allowed for more accurate coverage of raw material needs on a quarterly basis, thereby reducing price volatility risks. The Company also reported that in the fourth quarter of 2024, the price of raw materials used by the Company increased due to two main factors: on one hand, the rising demand for natural raw materials also used in the production of biofuels for aviation and maritime transport. European regulations require the increasing use of sustainable fuels for these sectors starting in 2025. This trend has intensified competition for the procurement of certain raw materials, such as Pine Oil and Category I and II Tallow, leading to price pressures. However, this context has also driven increased demand for certain Green Oleo products developed from alternative feedstocks to those used in the production of SAF (Sustainable Aviation Fuels) and SMF (Sustainable Marine Fuels). In this regard, the launch in 2023 of fatty acids derived from acid oils sourced through a short supply chain has provided a competitive alternative, both technically and commercially, to Tall Oil Fatty Acids (TOFA), which are widely used in the biofuels industry; On the other hand, additional uncertainty stemmed from the postponement of the enforcement of the EUDR (EUropean Deforestation-free products Regulation), initially scheduled for December 30th, 2024. The uncertainty surrounding the regulation’s implementation, which began in October 2024 and was later resolved with the postponement decision approved in December, further fueled price pressures on palm oil and substitute raw materials, thereby impacting the sector’s supply chain dynamics. Considering the information disclosed in the press release and pending a meeting with the management to review the financial results of the past year, we confirm our recommendation: target price € 2.00, rating BUY, and risk level MEDIUM.

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