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S&P Confirms Rating Of 'BBB-/A-3' For Future Metro Business

By Steve Wynne-Jones
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Ahead of the demerger of Metro AG into two businesses, Metro Group and Ceconomy, ratings agency Standard & Poor's has confirmed an investment-grade 'BBB-/A-3' rating and stable outlook for the future food and wholesale business, Metro Group.

The ratings agency announced the rating following last week's decision by the Higher Regional Court of Düsseldorf (Oberlandesgericht), which paves the way for the demerger of the business in mid-July.

Debt Reduction

'The S&P credit analysts have based the rating on the assessment of both business and financial profile, which has remained almost unchanged since the preliminary rating from December 2016,' Metro Group wrote in a statement, adding that the business has reduced its net debt by some €5 billion over the past few years and, by doing so, has clearly improved its financial profile.

'As Europe’s largest wholesale and food specialist, S&P views its international diversification and established market position in growth regions such as China and Russia to be positive,' Metro added. 'A strong real-estate ownership, a comfortable debt and liquidity profile, and sound financial policy support the rating'.

S&P noted that Metro has a strong presence in the HoReCa segment, while 'approximately three quarters of sales in the wholesale business were accounted for by regular customers' in the 2015/16 financial year, which is considered positive.


Stock-Exchange Prospectus

Elsewhere, Metro has published its stock-exchange prospectus, with the shares of the new Metro AG expected to be listed on the stock exchange by mid-July 2017.

"Our ambitious timetable is still fully on track, and we are now on the home straight. Two dynamic, clearly focused and well-positioned companies in their industries will come into being," said Olaf Koch, chairman of the management board of Metro AG.

"With the listing of the new Metro planned for mid-July 2017, both companies will now be able to grow independently and to position themselves in an agile and flexible manner," said Koch.

© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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