Annual Report 2012/13

Ratings

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July 29, 2014: Standard & Poor's Revised Outlook of Barry Callebaut To Stable On Improved Credit Metrics

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News release

May 8, 2013: Moody’s downgrades Barry Callebaut from Baa3 to Ba1

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Rating reports

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Barry Callebaut has active relationships with Standard & Poor’s and Moody’s. Their current ratings are:

Moody's Ba1/Stable Corporate Family Rating
  Ba1/Stable Senior unsecured notes (EUR 350 m)
S&P BB+/Stable Corporate Credit Rating
  BB+/Stable Senior unsecured bank loan (EUR 850 m)
  BB+/Stable Senior unsecured notes (EUR 350 m)
  4 Recovery rating

Standard & Poors comments:

  • Barry Callebaut's sales are increasing and the operating margin is fairly stable, thanks to the chocolate industry's resilience.
  • The group's credit metrics weakened somewhat after it acquired Petra Foods last year, but we believe they should stay in line with our significant category, provided there are no new large acquisitions.
  • We are therefore revising our outlook on Barry Callebaut to stable from negative and affirming our 'BB+' long-term ratings on the group.
  • The stable outlook reflects our view that Barry Callebaut will maintain an adjusted debt-to-EBITDA ratio of 3x-4x and EBITDA interest coverage in the 3x-6x range.

Moody’s comments:

  • Barry Callebaut’s Ba1 rating reflects the fact that recent acquisitions, infrastructure investments and costs associated with outsourcing contracts have weakened Barry Callebaut’s key credit metrics, which we expect to remain in high-yield territory for the foreseeable future. Further, the Petra transaction -- which the company expects to complete in summer 2013 -- will test Barry Callebaut’s ability to turn around the financial performance of a large business. Barry Callebaut is reliant on politically unstable countries such as Côte d’Ivoire for the supply of cocoa beans. Whilst we recognise that the political situation in Côte d’Ivoire has stabilised since the turmoil in 2011, and that Barry Callebaut has begun diversifying to countries with a more stable political environment such as Malaysia and Indonesia (and Brazil through the Petra acquisition), the company remains significantly exposed to politically unstable countries. This adds to existing supply disruption risks, although these are inherent to the industry.

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