Koninklijke FrieslandCampina N.V.

Overview Key strengths Key risks One of the largest global dairy companies, with good product, channel, and geographic diversity. Increasing scrutiny in the Netherlands around dairy farms' nitrogen emissions could weigh on dairy product businesses' profits. Portfolio of well-known local and global brands and private label product offering provide profitable growth opportunities. Weak consumption trends in mature markets and in volatile markets like Nigeria limit the performance of the branded dairy business. Large presence in Asia and Africa with positive volume growth prospects. Negative demographics and high competition in China limit growth prospects of the highly profitable infant milk formula business. Prudent financial policy supporting an S&P Global Ratings-adjusted debt leverage ratio close to 3.5x. Exposure to commodity dairy prices

...A sharp decline in dairy commodity prices and a difficult consumer environment have impacted Koninklijke FrieslandCampina N.V.'s (Royal FrieslandCampina's; RFC's) operational performance in 2023 and reduced its rating headroom. RFC's revenue declined by 7% in 2023, primarily reflecting an 8% revenue decline in its food and beverages division. This came from lower consumer demand for dairy products as consumers look for more affordable private-label alternatives amid high inflation and a lower purchasing power. Revenue also declined by 11% in...

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