S&P lifts Froneri International

S&P said it raised its ratings on Froneri International Ltd. and its bank loans to BB- from B+ after beating the agency’s projections. The 3 (55%) recovery ratings are unchanged.

“Despite the challenging environment for packaged food companies, Froneri's revenue increased by close to 20% and adjusted EBITDA margin improved by 100 basis points versus 2021, leading to S&P Global Ratings-adjusted EBITDA of €790 million, up from €624 million in 2021. We believe Froneri is evolving in a relatively large and resilient ice cream market and should benefit from its positioning as both a branded and private-label ice cream manufacturer to offset potential downtrading from consumers,” S&P said in a press release.

The agency said it estimates Froneri to deliver adjusted EBITDA of around €900 million in 2023 and nearly €1 billion in 2024 with positive FOCF increasing to about €200 million in 2024 from around €100 million in 2023, and EBITDA growth offsetting higher interest and capex. “This implies adjusted leverage decreasing to about 6x, with FFO cash interest coverage at about 3x.”

The outlook is stable.

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