S&P rates PHM SF, loan B

S&P said it assigned B ratings to PHM SF Dutch Bidco BV (Signature Foods) and its new term loan.

“We forecast that over the next two years, SF will have adjusted debt to EBITDA of 6x-6.5x, fund from operations (FFO) cash interest of 4x-5x, and positive FOCF. We believe SF will pursue regular acquisitions to consolidate the fragmented chilled food sector in Benelux and throughout Europe and have included this in our financial projections,” S&P said in a press release.

“We view SF's good track record of positive FOCF over past years as supporting the rating. We estimate FOCF of up to €10 million in fiscal 2022 due mostly to high capital expenditure (capex), followed by a rebound in fiscal 2023 to about €25 million thanks to higher EBITDA and lower capex,” the agency said.

The outlook is stable. The outlook indicates an expectation Signature’s operating performance will remain resilient, given its large exposure to the retail channel and ability to maintain good profitability, with an adjusted EBITDA margin of 17%-18.5%, the agency said.

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