Group of Butchers

Overview Key strengths Key risks Above-average margins for the meat processing industry. Modest scale of operations compared with rated global peers. Focus on profitable growing categories supports volumes, despite industry and macroeconomic headwinds. High geographic concentration in the Netherlands and strong reliance on a few Dutch retailers. Close links with key retailers allow for the swift pass through of input cost hikes. Lack of brand equity, given that its private-label business represents about 80% of revenue. High cash flow conversion supported by well-invested asset base, low seasonality of demand, and efficient working capital management. Highly leveraged capital structure, with adjusted debt to EBITDA remaining at about 5x, reflecting its private-equity ownership. In 2022 revenue increased 12% organically, mainly spurred by

...S&P Global Ratings expects Group of Butchers (GoB) will continue weathering inflationary pressures by increasing its prices, although profitability will likely remain strained by the lag to pass on higher input costs. In 2022 revenue increased 12% organically, mainly spurred by continued pricing activity to offset input cost inflation in raw materials--notably meat and packaging,...

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