Corporate Credit Rating for BARILLA INIZIATIVE S.P.A.: A3+ (Upgrade)

modefinance published on its CRA website the Corporate Credit Rating of BARILLA INIZIATIVE S.P.A. and the rating assigned to the entity is A3+ (Upgrade).

The company has a good capability of meeting its financial obligations. The high capitalization ensures low dependence on possible adverse macroeconomic conditions.

Reasons behind the review: the publication of 2018 Annual Accounts.

The reasons that have driven this decision are:

• The Group confirms its economic and financial solidity, having a good solvency, an adequate liquidity and a good profitability. Financial and equity structure is solid, able to maintain a long-term balance in a period of economic uncertainty. The company's cash flow is positive, improved respect the previous year. Despite the tougher and fragile economic scenario, Barilla managed to reach a growth in operating sales.
• Comparing Barilla Iniziative Spa with its peer group, the company is well positioned in terms of turnover (100th percentile of the peer group distribution). The solvency ranking could be improved (45/100) respect to its peer group, while the profitability ranking is within the best companies of the same sector with a ranking of 90/100.
• Barilla Group is a well-established company with a long history, founded in 1877, with more than 140 years since foundation. It’s a well-diversified company, which operates internationally in 26 countries. All the group companies achieved good results in 2018.
• Analyzing the industry’s creditworthiness, solvency of the peer group is improving, and it remains at an adequate level, both for leverage and financial leverage. Liquidity ratios are stable at adequate levels. Finally, profitability for the industry has also improved in the last two years considered, settling at sufficient levels. Barilla Iniziative Spa outperformed in terms of profitability.
• Despite the progressive global economic slowdown, characterized by uncertainty and slowing consumption trends that caused some companies to suspend their investments, in 2018 Barilla shows an increase in sales.
• Barilla is the only bidder for the purchase of pasta ZARA, located in Muggia (Trieste), for which it will pay 118 million Euros. It is expected that the purchase will lead to benefits in terms of turnover in favor of Barilla.
• The trade war between China and USA and the increase in protectionist policies continues to represent a point of uncertainty in the upcoming year.

The present Corporate Credit rating is issued by modefinance under EU Regulation 1060/2009 and following amendments.

The present rating is unsolicited: the rated entity and/or related third parties have not participated in the rating process and modefinance has no access to accounts or other relevant internal documents of the rated entity and/or related third parties.

Solicited and unsolicited ratings issued by modefinance are of comparable quality, as the solicitation status has no effect on methodologies used.

More comprehensive information on modefinance Corporate Credit Ratings are available on this link.

The present Corporate Credit Rating is issued on MORE Methodology 2.0 and Rating Methodology 1.0. A comprehensive description of both methodologies, as well as information on modefinance Rating Scale and Mappings, is available on this link.

For information on historical default rates of modefinance Corporate Credit Ratings please refer to ESMA Central Repository and ESMA European Rating Platform.

The quality of the information available on the rated entity and used to determine the present rating was judged by modefinance as satisfactory. Please note that modefinance however is not in a position to guarantee the accuracy of those information. As such, modefinance can accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect. The present credit rating was notified to the rated entity in order to identify potential factual errors, as prescribed by the CRA Regulation.

The Rated Entity or Related Third Party has not purchased ancillary services from modefinance. The rating action issued by modefinance was performed independently. The analysts, members of the rating team involved in the process, modefinance and its members and shareholders do not have any conflicts of interest in relation to the Rated Entity and/or Related Third Parties. If in the future a potential conflict of interest is identified in relation to the persons reported above, modefinance Ratings will provide the appropriate information and if necessary the rating will be withdrawn.

The present Credit Rating is an opinion of the general creditworthiness that modefinance issues on the rated entity, and should be relied upon to a limited degree. The issued rating is subject to an ongoing monitoring until withdrawal.

Giulia Valentina Facchini – Head Analyst
giulia.facchini@modefinance.com
+39 040 3756742

Eva Vocci – Assistant Analyst
eva.vocci@modefinance.com
+39 040 3756740

Pinar Dilek – Responsible for Rating Approval
pinar.dilek@modefinance.com
+39 040 3756740