LONDON – Steady and impressive sales gains in markets outside Greece have prompted Moody’s Investors Service to change the credit ratings outlook of Fage International S.A. to stable from negative.
Strength in the United States has offset what remains a highly challenging environment for Fage in Greece. The company is the largest yogurt maker in Greece and is the No. 4 U.S. yogurt company.
In the United States, 2012 sales were up 27% from the year before with volume up 32%.
“This increase was driven by the health food trend in the U.S. and the fact that yogurt is a cheap source of protein,” Moody’s said.
Sales volume rose 29% and 7%, respectively in Italy and the United Kingdom in 2012, Moody’s said.
“This geographic diversification helps mitigate the more challenged performance of Fage’s Greek operations, which represented approximately 31% of sales in 2012,” Moody’s said.
Moody’s affirmed the B3 corporate family rating for Fage, affecting $400 million of senior unsecured notes maturing in February.
Looking beyond 2013, Moody’s predicted a “bottoming-out—of sales volume declines sustained in Greece over the past two financial years.”
Moody’s warned additional capacity addition in the United States “will weaken the company’s cash flow metrics.”