Bulletin: Lower Dairy Product Profitability And New Restructuring Costs Reduce FrieslandCampina's Rating Headroom - S&P Global Ratings’ Credit Research

Bulletin: Lower Dairy Product Profitability And New Restructuring Costs Reduce FrieslandCampina's Rating Headroom

Bulletin: Lower Dairy Product Profitability And New Restructuring Costs Reduce FrieslandCampina's Rating Headroom - S&P Global Ratings’ Credit Research
Bulletin: Lower Dairy Product Profitability And New Restructuring Costs Reduce FrieslandCampina's Rating Headroom
Published Oct 18, 2023
3 pages (1582 words) — Published Oct 18, 2023
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Abstract:

This report does not constitute a rating action. PARIS (S&P Global Ratings) Oct. 18, 2023--The weak performance of Koninklijke FrieslandCampina?s (Royal FrieslandCampina or RFC) in the first half of 2023 under difficult market conditions, along with its announced restructuring, significantly reduces its rating headroom. We now forecast the company will achieve S&P Global Ratings-adjusted debt to EBITDA of 5.5x-6.0x and funds from operations (FFO) to debt of 14%-16% in 2023, which is weaker than in our previous base case published in May 2023 (3.5x-3.6x and 20%-25%, respectively). We forecast that a normalizing dairy market and the positive impact from the restructuring will support credit metrics improving in 2024 such that RFC?s adjusted debt to EBITDA returns to 3.5x-4.0x and its

  
Brief Excerpt:

...October 18, 2023 This report does not constitute a rating action. PARIS (S&P Global Ratings) Oct. 18, 2023--The weak performance of Koninklijke FrieslandCampina's (Royal FrieslandCampina or RFC) in the first half of 2023 under difficult market conditions, along with its announced restructuring, significantly reduces its rating headroom. We now forecast the company will achieve S&P Global Ratings-adjusted debt to EBITDA of 5.5x-6.0x and funds from operations (FFO) to debt of 14%-16% in 2023, which is weaker than in our previous base case published in May 2023 (3.5x-3.6x and 20%-25%, respectively). We forecast that a normalizing dairy market and the positive impact from the restructuring will support credit metrics improving in 2024 such that RFC's adjusted debt to EBITDA returns to 3.5x-4.0x and its FFO to debt to 19%-22%. RFC's operational performance in the food and beverage division was under pressure in the first half of 2023 because of lower volumes sold to consumers looking for affordable...

  
Report Type:

Bulletin

Ticker
1363Z@NA
Issuer
Koninklijke FrieslandCampina N.V.
GICS
Packaged Foods & Meats (30202030)
Sector
Global Issuers
Country
Netherlands
Region
Europe, Middle East, Africa
Format:
PDF Adobe Acrobat
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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Bulletin: Lower Dairy Product Profitability And New Restructuring Costs Reduce FrieslandCampina's Rating Headroom" Oct 18, 2023. Alacra Store. May 19, 2025. <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-Lower-Dairy-Product-Profitability-And-New-Restructuring-Costs-Reduce-FrieslandCampina-s-Rating-Headroom-3072341>
  
APA:
S&P Global Ratings’ Credit Research. (). Bulletin: Lower Dairy Product Profitability And New Restructuring Costs Reduce FrieslandCampina's Rating Headroom Oct 18, 2023. New York, NY: Alacra Store. Retrieved May 19, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-Lower-Dairy-Product-Profitability-And-New-Restructuring-Costs-Reduce-FrieslandCampina-s-Rating-Headroom-3072341>
  
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