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FrieslandCampina impresses rating agency
FrieslandCampina has made a positive impression on credit rating agency S&P with its 2024 annual report and adjusted share price. While its credit rating remains unchanged, the rating agency has increased its confidence in the dairy producer's performance.
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Both the better-than-expected 2024 result and the company's current course of action to distance itself from commodity markets earned Standard & Poor's thumbs-up. Positive steps cited include FrieslandCampina's excellent performance in the Chinese premium infant nutrition market and its significant investment in increasing the production volume of high-quality proteins, particularly for health and sports nutrition.
S&P is also impressed with the pace at which the debt load has been reduced. This makes the company stronger and less vulnerable.
The improved performance in the volume markets is also appreciated, but the results there are more dependent on rapid changes and can therefore fluctuate more.
Well done, but no higher grade
However, S&P does not award FrieslandCampina a 'higher rating'. The rating remains BBB+. Just as before fellow agency Fitch did. It is noteworthy that the report pays little attention to the proposed merger with Milcobel. The recently presented half-year figures appear to barely taken noticeThese figures were also very good, by the way. FrieslandCampina did, however, have to take currency fluctuations and the like into account.
S&P also continues to see vulnerabilities for FrieslandCampina, such as commodity prices and a market that can turn quickly.