Research Update: HelloFresh SE Assigned 'BBB-' Rating; Outlook Stable

Direct-to-consumer food company HelloFresh SE reported €7.6 billion in sales and €455 million in S&P Global Ratings-adjusted EBITDA in 2022, and S&P Global Ratings-adjusted leverage below 1.5x. The group enjoys a leading position in the niche meal-kit business, and is diversifying toward the ready-to-eat (RTE) segment and other brands and geographies. We expect leverage well below 1.5x in S&P Global Ratings-adjusted terms in our forecast horizon through 2025. Although the group's expansion into new segments and geographies presents some execution risk, the largely self-funded nature of this plan, thanks to positive free operating cash flow (FOCF) generation and a supportive financial policy, mitigate our perception of the associated credit risk. Therefore, we assigned our 'BBB-' long-term issuer credit rating to

...- Direct-to-consumer food company HelloFresh SE reported 7.6 billion in sales and 455 million in S&P Global Ratings-adjusted EBITDA in 2022, and S&P Global Ratings-adjusted leverage below 1.5x. - The group enjoys a leading position in the niche meal-kit business, and is diversifying toward the ready-to-eat (RTE) segment and other brands and geographies. - We expect leverage well below 1.5x in S&P Global Ratings-adjusted terms in our forecast horizon through 2025. - Although the group's expansion into new segments and geographies presents some execution risk, the largely self-funded nature of this plan, thanks to positive free operating cash flow (FOCF) generation and a supportive financial policy, mitigate our perception of the associated credit risk. - Therefore, we assigned our '###-' long-term issuer credit rating to HelloFresh. - The stable outlook reflects our expectations that HelloFresh will implement its 2025 strategy as planned while preserving S&P Global Ratings-adjusted EBITDA...

Research Update