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Kri-Kri | The taste of acceleration; when demand meets dynamo

Export engine accelerates; Buy – Following the 9M’25 and improved visibility on demand and pricing into 2026, our confidence in KRI’s growth trajectory has increased. We see international yogurt momentum, mainly in the UK and Italy (sales +63% and +21% in the 9M), reinforcing the export-led strategy, supported by expanding shelf presence and sustained demand for natural, high-protein products. With capacity set to ramp through 2027 (supporting c€500mn in sales by 2029e), KRI is positioned to translate strong demand into higher volumes. Reflecting these dynamics, we have lifted our revenue forecasts 4–9% over 2025–27e, now envisaging 24% growth in 2025e, 18% in 2026e and 11% in 2027e. On the profit front, we expect price increases from H2’25 to facilitate pass-through of elevated input costs, allowing gross margins to recover toward c29–30% from next year onwards after a temporary dip in 2025e. This underpins a rebound in EBIT margins to c15–16% in 2026–27e and a c15% EBIT CAGR over 2025–29e, supported by operating leverage. Despite the strong run in the share price ytd (27%), the growth and pricing setup suggest incremental upside toward €22.4/share with upside risk to our estimates, thus supporting our Buy recommendation.

9M’25: Strong top line growth continuing unfettered, early signs of margin stabilization emerging – The 9M performance confirms that Kri-Kri’s 2-digit sales growth trajectory remains intact, with sales up 25% yoy and Q3 run-rates even stronger sequentially, driven primarily by international yogurt volumes. Although elevated input costs and a growing private-label mix continued to weigh on gross margins, Q3 delivered €2.3m higher EBIT yoy (from €3.8m lower in H1), supported by pricing and milder opex inflation, reflecting economies of scale. With further pricing pass-through expected in Q4’25/H1’26, the pathway to margin recovery is becoming more visible, in our view.

Internally funded growth; capacity expansion to unlock further upside; scope for heftier cash returns – Kri-Kri continues to generate strong free cash flow, consistently converting c80% of EBITDA into operating cash, enabling the company to fully self-fund its investment program without leveraging the balance sheet. This financial strength supports the €52m capacity expansion plan for 2025–27 (Greek Yogurt Dynamo), aimed at doubling yogurt and ice-cream output and equipping the business to support c€500m in annual sales. The company’s robust cash-generating profile is further evidenced by its sector-leading returns, with ROE expected to stay above 24–25% and a net cash position of c€19m in 2025e on our estimates. Importantly, solid FCF provides strategic flexibility and leaves ample room for continued shareholder distributions ahead (EEe 38% payout).

Valuation: increasing PT to €22.4 – We recalibrate our valuation filtering through c11%/7% EBIT upgrades in 2026-27e, while also lowering our WACC to 8.7% to reflect the stock’s improved liquidity. As such, we raise our PT to €22.4, effectively valuing KRI at c10.9x 2026e EV/EBITDA, a small premium vs the current valuation of foreign peers, that we view as justified by the company’s superior growth trajectory and clean balance sheet, more than offsetting its smaller scale. Our reverse-engineering exercise also shows that the current valuation is c15% lower than the value implied by current and near-term operating profits, which seems overly conservative as it effectively implies limited value creation in the outer future.