Corporate Credit Rating for BARILLA INIZIATIVE S.P.A. (First Issuance)

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

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

The reasons that have driven this decision are:

• The Group confirms in time 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 times of economic uncertainty. The company's cash flow is positive, despite the distribution of the dividends which reduced the closing cash. The operating cash flow can face the investments that the Group is implementing. Excellent management of working capital.
• 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 (39/100) respect to its peer group and the profitability ranking is within the best companies of the same sector with a ranking of 82/100.
• 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. In 2018, the Group has undergone a simplification of the corporate chain through two mergers by incorporation, which are considered not to have a negative impact on the analysis. Both the parent company and the main subsidiary have solid balance sheet and financial situations.
• As for solvency and liquidity, Barilla proves to be tendentially more performing than the sector. As for profitability, for all the considered period, profitability indicators definitely outperformed the peer group's median.
• The Group is mostly subject to macroeconomic situation of Italy (almost the half of turnover), Europe and USA. In 2017 it has been registered a recovery in all areas, with all macroeconomic indicators in improvement. Anyway, 2018 and 2019 forecast underline a slowdown in growth in Italy.
• Situation of global economic and political instability (protectionist policies, spread, quantitative easing) throws a shed of uncertainty on future macroeconomic scenarios, but apparently are under the control of management.

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

The present Corporate Credit 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 at 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 at 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 Srl 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.

Chiara Di Piazza - Head Analyst
chiara.dipiazza@modefinance.com
+39 040 3756742

Fabio Politelli - Assistant Analyst
fabio.politelli@modefinance.com
+39 040 3756742

Pinar Dilek - Responsible for Rating Approval
pinar.dilek@modefinance.com
+39 0403756740