FrieslandCampina's creditworthiness stable

De youngest Valuation expects lower turnover growth and earnings this year than last year, despite the higher prices on the dairy market. On the other hand, due to the introduction of delivery certificates, FrieslandCampina has a lower debt burden and also has more of its own resources available to make investments. The assessor is more positive than a few years ago. It is certainly not yet the highest credit rating at S&P: that is AAA for the long term and A-1 for the short term.

The margin on turnover at FrienslandCampina will decrease, S&P predicts due to higher marketing expenditure and investments in improving installations and investments in factories. The credit rating agency believes that FrieslandCampina can invest approximately €450 million in new installations this and next year. This will put considerable pressure on the cash flow this year, but there will be more room in the following years.

Not automatically good
FrieslandCampina will not automatically do well in the coming years. S&P emphasizes that the dairy company must succeed in passing on the higher purchasing prices to customers and at the same time not allowing the debt burden to increase again. With regard to child nutrition, the credit bureau notes that earnings are still declining, but that FrieslandCampina is trying to compensate for this by switching to nutrition for older people. S&P is also still taking into account the possibility that FrieslandCampina will divest its infant nutrition business completely, but notes that the reorientation on this has not been completed.

FrieslandCampina does not express an opinion on the report, but lets the piece speak for itself.