Kri-Kri | Sweet scoop of growth; US entry bolsters outlook
Material profit re-set affirmed; strong profit compounder thanks to international expansion; Buy – KRI has been building on its dominance in the Greek market expanding its foreign footprint (intl sales >50% of the mix in 2024e), thus growing volumes strongly (20% in 2024e) while improving mix (e.g. protein yogurt in European markets, entry into the US through frozen yogurt). The latter is set to unlock additional growth avenues through PL partnerships. Following on from the impressive execution in H1 (EBIT +2% on very tough comps), we have lifted our numbers materially (14-17% at EBIT level in 2024-26e) envisaging EBIT settling at over €40m in 2024e. We model double digit EBIT growth for 2025e and high single digit thereafter, predicated on low-teens volume growth only partly offset by mild gross margin erosion. We envisage EBIT margins stabilizing near the 16% area in the coming years, lower than the ultra-high margins of 18.6% in 2023 but 2pps above the cross-cycle margins of food manufacturers thanks to Kri-Kri’s operational efficiency and continued focus on cost control. The sustainable high-single digit EBIT growth seems quite a compelling proposition, with risks to our numbers positively skewed in case of successful penetration in the US. With the stock still at €245m. Effectively, this boils down to FY24 EBIT slightly higher than the record 2023, and some 2.3x the respective 2019 level, a material profit reset vs prior years.Internally funded augmented investment plan; scope for heftier cash returns – In light of the higher growth prospects, management has revised its capex envelope for the coming years guiding for €50m investments over 2025-2027e in order to double production capacity. These investments are set to be funded through organic OCF, thanks to Kri-Kri’s strong cash-generating ability (>70% conversion of EBITDA into OCF over the past 7 years). Further optionality is provided by the robust and debt-free balance sheet, with 2024e net cash at €19m on our numbers. Our model assumes a c36% dividend payout ratio, with KRI building further war chest in the coming years for accretive investments or heftier cash returns.
Valuation: increasing PT to €16.6; High-conviction Buy – As a result of the material profit uplift and the roll-over of our valuation to Nov 2025, we raise our PT to €16.6, effectively valuing KRI at c10x 2025e EV/EBITDA, namely more in symphony with the valuation of foreign peers, as we argue that KRI’s superior growth offsets the drawback of the smaller size and liquidity. We reiterate our high-conviction Buy, finding the valuation palatable given the stock is trading at
Kri Kri Milk Industry SA. Kri Kri Milk Industry SA is a Greece-based company principally engaged in the production and trade of ice cream, yogurt and milk. The ice cream production includes five product lines: Cones, Ice Cream Cups, Scoop Ice Cream, Sticks, and Ice Cream Sandwiches. The yogurt production includes five product lines: Plain, Traditional, Catering, Fruit, and flavored yogurt for children under the brand name Scooby Doo. The milk production includes four products: Full cream pasteurized milk 3.5% Fat, Semi-skimmed pasteurized milk 1.5% Fat, Chocolate skimmed milk 0% Fat, and AYRAN (KEFIR) KRI-KRI. The Company also offers some of its products in family packs. KRI-KRI Milk S.A. is also active in the Balkans region through 71%-owned subsidiary KRI-KRI DOO Kumanovo, in Macedonia which has an autonomous production line of ice cream and yogurt, warehouses and cooling chambers. In February 2013, the Company dissolved its subsidiary in Bulgaria, KRI KRI BULGARIA A.D.
Eurobank Equities is a Greek-based firm offering research, sales and trading services to institutional, corporate and private clients. The company is wholly owned by Eurobank, one of the 4 systemic banks in Greece.
Research is the backbone of Eurobank Equities' platform, with a team of 4 professionals committed to generating actionable investment ideas by providing timely research products. We are committed to offering value-added services to clients by filtering market noise and providing insights on the multiple sectors that we cover. Our universe includes 26 - large, medium and small cap - companies whose market capitalization amounts to 80-85% of the total market capitalization of the Athens Stock Exchange. Our research team also maintains the capacity to generate ad-hoc research for micro-cap listed companies.
Our team has consistently gained recognition among institutional investors for its quality research, having ranked No. 1 team in Greece at the Extel Surveys of 2013-2016 and 2018. We have also been named Leading Brokerage Firm in Greece over 2014-2016 and in 2018.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.