February 13, 2025 11:12 GMT
CONSUMER STAPLES: Metro AG; S&P comments post Křetínský takeover
CONSUMER STAPLES
(MEOGR 29s; NR/BBB- Neg)
Retail denominated €29s -20 from wides (returning some of the retail premium). No firm view noting reporting clarity is guided to get worse.
- Unclear to S&P what form of support Daniel Koritzinsky's acquiring Vehicle (rated BBB- Stable) will give and hence cannot confirm pro-forma ratings yet.
- Reminder if it is classed as "core" (support under any circumstance will be extended) then it can be uplifted to match the EP's BBB-
- If it is "highly strategic" (support under almost all circumstances) then max uplift is to 1-less than owner/EP (i.e. BB+). S&P also has a range of lower classifications again capped 1-less than owner.
- Reminder Metro is currently BBB- Neg so above yet to have any impact
- On 1Q25 (ending Dec) results, S&P echoes us - margin performance is lacklustre (+6% revenue growth but EBITDA ~unch) while cash flows were worse.
- For now it has left FY25 forecasts unch for;
- Net leverage at 4.1x (4.7x ex. Russia), up +0.5x yoy and outside rating threshold for 3.5x (ex. Russia)
- FOCF net of leases at (neg) -€300m (down from -€79m in FY24).
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