VILVI Group Posts Strong Q1 Growth Fueled by Strategic Acquisition

VILNIUS, LITHUANIA – May 29, 2026 – Lithuanian dairy giant VILVI Group has announced a strong start to the year, reporting significant double-digit growth in both revenue and profit for the first quarter of 2026. According to preliminary unaudited data, the group's consolidated sales revenue surged by 22.4% to reach €87.0 million, a substantial increase from the €71.1 million recorded in the same period last year. Net profit followed a similar upward trajectory, rising 25.7% to €5.1 million from €4.0 million in Q1 2025.

This impressive top-line performance is largely attributed to the recent strategic acquisition of Marijampolės pieno konservai UAB (MPK), a major dairy processor specializing in canned milk and milk powders. The deal, completed on January 16, 2026, has significantly expanded VILVI Group's production capacity and product portfolio, solidifying its position as one of the largest dairy processors in the Baltic region.

Acquisition Drives Revenue Amid Margin Pressure

The integration of MPK's operations was a primary catalyst for the quarter's growth. The company, which VILVI Group acquired for €7.5 million, was consolidated into the financial results for most of the first quarter. The impact was immediate, with canned milk, a key product of MPK, contributing €11.9 million, or 14% of the group's total revenue in Q1 2026. Prior to its acquisition, MPK had generated annual revenues of €65 million, with projections for future growth.

However, a deeper look into the preliminary results reveals a more complex financial picture. While revenue and net profit saw robust increases, the group's underlying operational profitability faced headwinds. Excluding a one-time positive effect of €5.5 million in negative goodwill resulting from the acquisition, the group's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) saw a significant decline of 50.2% year-over-year, settling at €3.0 million. This suggests that the group is experiencing margin pressure, a challenge reflective of the broader market conditions.

Navigating a Turbulent Regional Market

VILVI Group's strong sales performance is particularly noteworthy given the prolonged crisis currently gripping the Lithuanian dairy sector. The industry is grappling with a severe downturn characterized by a sharp decline in raw milk purchase prices coupled with escalating production input costs. In the first quarter of 2026, the average milk purchase price was approximately 15.8% lower than the average of the preceding three years, creating immense pressure on dairy farmers.

Furthermore, export markets, which are critical for Lithuania's major processors, have shown signs of deterioration. Processors have reported difficulties in international markets, particularly for cheese, leading to accumulating stocks and prices that have reportedly fallen below production costs. The Lithuanian dairy market is highly concentrated, with VILVI Group competing against other major players like Pieno žvaigždės, Rokiškio sūris, and Žemaitijos pienas. In this challenging environment, VILVI's ability to grow its top line, aided by its acquisition strategy and strong export focus, sets it apart.

A Blueprint for Expansion and Innovation

Despite the immediate market challenges, VILVI Group is executing an ambitious, forward-looking strategy centered on large-scale investment and innovation. The cornerstone of this strategy is the construction of a new, state-of-the-art cheese factory in Bauska, Latvia. Representing the largest single investment in the group's history at over €40 million, the facility is designed to substantially increase cheese production and export volumes.

Crucially, the Latvian factory will enable the local processing of milk sourced from farmers in Latvia and Estonia, which was previously transported to Lithuania. This move is expected to add significant value to the local economy and improve logistical efficiency. The project is being financed through a combination of company funds, bank loans, and anticipated government support. The new facility will also focus on product innovation, producing new types of unripened and semi-hard cheeses that are new to the Latvian market, leveraging research and development from the parent company.

Beyond this flagship project, the group is also investing in other key areas, including the installation of renewable energy resources and the purchase of new cheese packaging technology to enhance operational efficiency and sustainability. This export-driven model and commitment to continuous investment are central to the group's plan to mitigate risks associated with regional market volatility and strengthen its competitive edge.

Strategic Integration and Future Outlook

Looking ahead, the successful integration of Marijampolės pieno konservai UAB remains a key priority. VILVI Group plans to fully utilize MPK's assets, including its butter production line, which is the largest in the Baltic states, while continuing to develop its product portfolio. The group's leadership has previously emphasized a focus on improving operational efficiency, automating production processes, and maintaining a strong commitment to sustainability, where it has been recognized as one of the leading brands in Lithuania's food and beverage industry.

By combining strategic acquisitions with significant organic investment in new technologies and production capabilities, VILVI Group is positioning itself for sustained long-term growth. The company's actions demonstrate a clear strategy to consolidate its market share, enhance its product offerings, and expand its international footprint. These strategic initiatives are designed to fortify its market leadership and ensure future growth as it navigates the complexities of the regional and global dairy landscape.