...Fitch Ratings changed Picard Bondco S.A.'s Outlook to Negative from Stable due to markedly slower- than-expected deleveraging prospect, driven by a decline in funds from operations (FFO) generation capacity. Picard has faced mounting competitive pressure from the rapid growth of some competitors, including organic-food retailers in France, as well as higher operating costs. Although refinancing needs are still far ahead, we see increasing pressure on the rating if the company is unable to show a deleveraging path and a robust free cash flow (FCF) generation capacity enabling a smooth refinancing process. The Issuer Default Rating is supported by Picard's leading position and strong brand in the frozen-food market in France and its continued high profitability ratios, which remain very high compared with peers even though they are under some pressure. These factors are offset by a very high leverage, which continues to be a rating constraint. We affirmed the Long-Term IDR at `B', and all...
