The milk industry, KRI-KRI has published its annual financial statements for the financial year 2023. Turnover was €216.33 million compared to €171.88 million in 2022 (up +25.9%).
Accordingly, the key profitability figures were as follows:
Gross profit amounted to €72.47 million compared to €31.46 million in 2022.
Operating profit (EBITDA) amounted to €45.12 million, compared to €8.86 million in 2022.
Profit before tax amounted to €40.30 million, compared to €3.83 million in 2022.
Finally, net profit after tax amounted to €32.27 million, compared to €3.18 million in 2022.
YOGHURT SECTOR
In the yoghurt sector as a whole, sales increased by +28.6% in value and +15.3% in volume. In international markets, sales show strong double-digit growth of +34.4%, exceeding €97.5 m. There is a significant boost from the key markets of Italy and the UK, as well as from other countries such as Sweden, Austria and Belgium. In terms of profitability figures, there is a recovery of margins to their normal levels. The EBIT margin, of course, is improving significantly due to the impact of economies of scale, which also bring about a reduction in the share of administrative and selling expenses, which are, for the most part, of a stable nature.
Sales of yoghurt on the domestic market are also showing very strong growth. Specifically, they show an increase of +21.8% in value, exceeding €76 million. The current situation with high inflation conditions has led the overall market to a limited increase in consumption volume (+3.4%), while the value shows a double-digit change of +10.1% [Circana (former IRI) data, Jan.-Dec. 2023]. At the same time, consumers continue to shift to private label yogurts as a result of their choices for cheaper products. The shifts taking place show the market share by volume of private label yogurts strengthening by +2.7 percentage points (+7.7 percentage points vs. 2021), putting strong pressure on branded yogurts. Continued pressure from private label yoghurt growth leads KRI-KRI branded yoghurts to a limited share loss (-0.7 percentage points in value terms). In terms of profitability, the gross margin is 29.9%, approaching 2021 levels (2021: 30.1%). Of course, economies of scale in the yoghurt industry have driven the EBIT margin to a high double-digit level (2023: 15.5%).
ICE CREAMS
In the ice cream segment, in the domestic market, our sales showed a high double-digit change (+20.4%) in value terms. The market share of KRI-KRI ice cream increased by 0.4 percentage points in volume (12.7%) and decreased by -0.4 percentage points in value (13.8%) [NIELSEN data, January–December 2023]. At a time when the inflationary environment favours the growth of private label products, KRI-KRI was the only company to increase its share in volume among branded ice cream products.
PROJECTIONS FOR 2024
Management of KRI-KRI remains optimistic about the company's financial performance in 2024, despite the challenging economic environment. In fiscal 2024, sales are expected to continue their upward trend. Based on management's estimate, total sales are expected to show an increase of between 8% and 11% compared to 2023, exceeding €233m. Regarding profitability margins, they are expected to show a slight decline, compared to those of 2023. Based on management's estimate, the EBIT margin for 2024 is expected to be in the vicinity of 15%.
Regarding the dividend policy, for the year 2023, the Board of Directors decided to increase the dividend significantly, proposing to the Annual General Meeting of Shareholders the distribution of a gross dividend of €0.35 per share (2022: €0.20 per share). This distribution is subject to the approval of the Annual General Meeting of shareholders.
