FITCH, the ratings agency, has compared the business models of two of Europe’s biggest poultry processors, Boparan Holdings and Ukrainian giant MHP.

It says that the two firms are each other’s closest peers in its ratings portfolio of EMEA protein suppliers.

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The two companies have comparable processing capacities, focus on only one protein type (poultry), have leading positions in their home markets and are exposed to risks related to a “concentration of sourcing regions”.

But, Fitch says, the two businesses have different business models “leading to dissimilar financial and risk profiles”.

MHP operates a vertical integration model, allowing it to operate at higher EBITDA margins by its peers, something also supported by a lower cost base in Ukraine.

Self sufficiency

“Self-sufficiency in key inputs allow MHP to control quality and input supply risks, reduce exposure to cost fluctuations,” the report says.

“MHP’s domestic operations are exposed to a less stable consumer spending environment in Ukraine, compared with that of Boparan’s, but these risks are mitigated by a higher share of export revenue.”

As a contrast, Fitch says that Boparan’s focus on slaughtering and cutting, with limited vertical integration into chilled ready meals, is “commensurate with the lower end of the industry average levels”.

EBITDA margins are below 5%, “also constrained by intense competition in its core markets”.


Fitch notes the firm is in the middle of a profit turnaround plan, but the agency assumes this will be delayed by challenges relating to the coronavirus pandemic.

“Both companies are exposed to risks related to sourcing region concentration. MHP’s results in 2020 were affected by an avian influenza outbreak in Ukraine, with several months of banned imports from Ukraine to a number of its markets.

“Boparan’s business in Poland has also suffered from closed exports to China in 2020.

“Further spreading of the disease remains a risk for both companies’ performance in 2021.”

The full report, and the two companies’ ratings, is available to order here.