Kiloutou / Kapla Holding : Mixed Q1 earnings: French Market Struggles Offset by International Growth and Strategic Acquisitions

Kiloutou (B1/B+) reported mixed Q1 2025 results due to a challenging market, with the deterioration of the top and bottom line. However, the company has managed to partially mitigate these challenges through effective cost management, contributing to strong FCF generation and prudent capital allocation. This enabled Kiloutou to preserve the financial positions throughout subdued leverage. The group enjoys from a strong liquidity and a favorable maturity schedule as 75% of gross debt are due after March 2030 offering crucial buffer amid challenging market conditions. In relative value we believe Kiloutou is expensive as the KILOTO 5 EUR Notes due in 2031 rated B1/B+, has a YTW at 4.89% compared to the Pan-Euro HY B Rating only which has a 6.84% YTW and the Pan-Euro HY BB Rating only which yield at 4.63%.