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Downgrade anche per Valeo da parte di Moody's, con il corporate rating di lungo termine che passa a Ba2, soprattutto sull'assunto, molto interessante per chi legge qui, che il mercato europeo dell'auto nel 2010 sarà debole e sotto i livelli del 2009, in conseguenza del ridursi in consistenza ed efficacia degli incentivi alla rottamazione varati da numerosi paesi europei.
Particolarmente debole - secondo Moody's - si prospetta l'andamento del mercato automobilistico premium in Europa, che è anche quello che si vale della componentistica di maggior pregio e a più elevato valore aggiunto.
Di conseguenza, nonostante i programmi di contenimento dei costi varati da Valeo e mirati alla salvaguardia dei margini e la consistente liquidità disponibile, con una modulazione delle scadenze debitorie ben dilazionata nel tempo, che non sollevano esigenza di rifinanziamenti nel breve termine, Moody's ritiene che i tempi per il recupero da parte di Valeo di una metrica finanziaria maggiormente in linea con il rating Ba2, in quanto attualmente i livelli di EBIT margin, di cash burning e di leverage collocano la metrica finanziaria di Valeo su livelli deboli anche rispetto al rating attuale.
L'outlook stabile esprime confidenza da parte di Moody's circa la possibilità che un tale recupero possa avere luogo in un arco di tempo successivo ai 12-18 mesi.
Moody's downgrades Valeo's ratings to Ba2/NP with a stable outlook
Approximately EUR1.0 billion of Debt Securities Affected
Frankfurt, August 12, 2009 -- Moody's Investors Service today downgraded to Ba2 from Ba1 the Corporate Family Rating (CFR) and the senior unsecured rating as well as the Probability of Default Rating (PDR) of Valeo S.A ("Valeo") with a stable outlook. The Not Prime short term rating was not affected.
Falk Frey, Senior Vice President and lead analyst at Moody's for Valeo, commented: "The rating change reflects Moody's view that the deteriorated market conditions in most automotive markets will not materially recover in 2010 and Valeo's key markets in Western Europe will decline compared to the current year due to the phase out of most incentive schemes. Despite the steps taken early by the company to adjust its cost base, the anticipated improvements in the company's financial flexibility over the intermediate term are likely therefore not be sufficient for the Ba1 rating category."
In the first half of 2009 Valeo reported a negative operating margin (operating income less income and expenses) of €51 million (-1.5% of sales) versus a positive margin of €203 million in H1 2008 (4.2% of sales). After deduction of other financial income and expenses of €37 million Valeo generated a negative operating income of €88 million in H1 2009 compared to an operating profit of €182 million in H1 '08.
Valeo expects that the rebound in automobile production will continue in the third quarter, through the combined impact of incentive programs for new vehicles in Europe and the return to growth in emerging markets.
Therefore, the company has revised upwards its automotive production forecast with an anticipated fall of 7% in the second half of the year and a fall of 17% for the full year as compared to -10% and -20% respectively for the second half and the full year. On the basis of this scenario, Valeo has set an objective of positive operating margin for the second half of the year and an improvement of its cash consumption for the full year limited to around €200 million after payment of €230 million related to restructuring costs.
Moody's notes that the successful implementation of cost savings resulting from measures to adjust production volumes and capacity as well as lower raw material costs resulted in a modest positive operating margin in the second quarter 2009 and Moody's would expect some further improvements in the second half of the current year based on higher production volumes compared to the first half this year.
Nonetheless, the decline in volumes expected by the agency in Western Europe next year as the scrappage programs are reduced or eliminated together with the deteriorated mix resulting from the strong trend towards smaller cars equipped with less value of content of supplier parts that in the agency's view could dampen any quick recovery to historical financial metrics.
Also, it is Moody's opinion that the announcement of a new organizational structure and its implementation could lead to additional upfront expenses over the next quarters that increase the likelihood that financial metrics targeted by Moody's for the current fiscal year in order to avoid a downgrade will not be achieved.
The Ba2 rating continues to reflect the company's size, its broad product range and leading market positions in the automotive supplier industry as well as a prudent financial policy which mitigate weak credit metrics for the category anticipated by Moody's in the intermediate term.
The stable outlook reflects the rapid and successful realisation of cost savings from the early implementation of vigorous restructuring measures to react to the current downturn in demand and even more important Valeo's solid liquidity profile which provides some time to bridge until operating performance and credit metrics will improve to be more in line with the Ba2 ratings. The stable outlook also acknowledges the fact that the company's competitive position has not eroded.
Positive pressure on the ratings could evolve should financial metrics (as adjusted by Moody's) recover more than anticipated over the next 12-18 months exemplified by (i) a rise in EBIT margins shifting close to 3.0% in 2010 with anticipation of further improvement onwards; (ii) free cash flow generation from 2010 onwards of more than Euro 100 million as well as (iii) Debt/EBITDA reduced towards 3.5x by 2010 with further improvement in the years beyond.
However, the ratings could come under further pressure in case of (i) worsening of market trends in the automotive sector than our current expectations next year especially in Europe or beyond 2010; (ii) failure to redress EBITA margin level over the medium term with an intermediate step of around 1.5% next year as well as (iii) inability to reduce leverage (Debt/EBITDA) to a level materially lower than 4.5x by 2010 and (iv) failure to return to a positive free cash flow from 2010 onwards.
Valeo's liquidity profile remains solid, with a long dated maturity schedule. Liquidity is provided by sizable amounts of cash readily available, a comfortable amount of headroom under its committed high quality bilateral bank lines maturing in more than 1 year as well as operating cash flows.
These sources should cover all cash needs over the next 12 months arising from debt maturities, capital expenditures, working capital and day-to-day needs as well as dividend payments. The Ba2 rating incorporates the assumption that the solid liquidity profile will be maintained over the medium term thereby maintaining solid headroom under its financial covenants.
Downgrades:
..Issuer: Valeo
....Probability of Default Rating, Downgraded to Ba2 from Ba1
....Corporate Family Rating, Downgraded to Ba2 from Ba1
....Multiple Seniority Medium-Term Note Program, Downgraded to a range of Ba3 to Ba2 from a range of Ba2 to Ba1
....Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 from Ba1
Outlook Actions:
..Issuer: Valeo
....Outlook, Changed To Stable From Negative
.....
Moody's last rating action on Valeo was a downgrade to Ba1/Not Prime with a negative outlook from Baa3/Prime-3 on January 7, 2009.
Valeo S.A., headquartered in Paris, is one of the leading global suppliers of automotive components. Valeo generated total sales of € 3.5 billion in the first half 2009
Particolarmente debole - secondo Moody's - si prospetta l'andamento del mercato automobilistico premium in Europa, che è anche quello che si vale della componentistica di maggior pregio e a più elevato valore aggiunto.
Di conseguenza, nonostante i programmi di contenimento dei costi varati da Valeo e mirati alla salvaguardia dei margini e la consistente liquidità disponibile, con una modulazione delle scadenze debitorie ben dilazionata nel tempo, che non sollevano esigenza di rifinanziamenti nel breve termine, Moody's ritiene che i tempi per il recupero da parte di Valeo di una metrica finanziaria maggiormente in linea con il rating Ba2, in quanto attualmente i livelli di EBIT margin, di cash burning e di leverage collocano la metrica finanziaria di Valeo su livelli deboli anche rispetto al rating attuale.
L'outlook stabile esprime confidenza da parte di Moody's circa la possibilità che un tale recupero possa avere luogo in un arco di tempo successivo ai 12-18 mesi.
Moody's downgrades Valeo's ratings to Ba2/NP with a stable outlook
Approximately EUR1.0 billion of Debt Securities Affected
Frankfurt, August 12, 2009 -- Moody's Investors Service today downgraded to Ba2 from Ba1 the Corporate Family Rating (CFR) and the senior unsecured rating as well as the Probability of Default Rating (PDR) of Valeo S.A ("Valeo") with a stable outlook. The Not Prime short term rating was not affected.
Falk Frey, Senior Vice President and lead analyst at Moody's for Valeo, commented: "The rating change reflects Moody's view that the deteriorated market conditions in most automotive markets will not materially recover in 2010 and Valeo's key markets in Western Europe will decline compared to the current year due to the phase out of most incentive schemes. Despite the steps taken early by the company to adjust its cost base, the anticipated improvements in the company's financial flexibility over the intermediate term are likely therefore not be sufficient for the Ba1 rating category."
In the first half of 2009 Valeo reported a negative operating margin (operating income less income and expenses) of €51 million (-1.5% of sales) versus a positive margin of €203 million in H1 2008 (4.2% of sales). After deduction of other financial income and expenses of €37 million Valeo generated a negative operating income of €88 million in H1 2009 compared to an operating profit of €182 million in H1 '08.
Valeo expects that the rebound in automobile production will continue in the third quarter, through the combined impact of incentive programs for new vehicles in Europe and the return to growth in emerging markets.
Therefore, the company has revised upwards its automotive production forecast with an anticipated fall of 7% in the second half of the year and a fall of 17% for the full year as compared to -10% and -20% respectively for the second half and the full year. On the basis of this scenario, Valeo has set an objective of positive operating margin for the second half of the year and an improvement of its cash consumption for the full year limited to around €200 million after payment of €230 million related to restructuring costs.
Moody's notes that the successful implementation of cost savings resulting from measures to adjust production volumes and capacity as well as lower raw material costs resulted in a modest positive operating margin in the second quarter 2009 and Moody's would expect some further improvements in the second half of the current year based on higher production volumes compared to the first half this year.
Nonetheless, the decline in volumes expected by the agency in Western Europe next year as the scrappage programs are reduced or eliminated together with the deteriorated mix resulting from the strong trend towards smaller cars equipped with less value of content of supplier parts that in the agency's view could dampen any quick recovery to historical financial metrics.
Also, it is Moody's opinion that the announcement of a new organizational structure and its implementation could lead to additional upfront expenses over the next quarters that increase the likelihood that financial metrics targeted by Moody's for the current fiscal year in order to avoid a downgrade will not be achieved.
The Ba2 rating continues to reflect the company's size, its broad product range and leading market positions in the automotive supplier industry as well as a prudent financial policy which mitigate weak credit metrics for the category anticipated by Moody's in the intermediate term.
The stable outlook reflects the rapid and successful realisation of cost savings from the early implementation of vigorous restructuring measures to react to the current downturn in demand and even more important Valeo's solid liquidity profile which provides some time to bridge until operating performance and credit metrics will improve to be more in line with the Ba2 ratings. The stable outlook also acknowledges the fact that the company's competitive position has not eroded.
Positive pressure on the ratings could evolve should financial metrics (as adjusted by Moody's) recover more than anticipated over the next 12-18 months exemplified by (i) a rise in EBIT margins shifting close to 3.0% in 2010 with anticipation of further improvement onwards; (ii) free cash flow generation from 2010 onwards of more than Euro 100 million as well as (iii) Debt/EBITDA reduced towards 3.5x by 2010 with further improvement in the years beyond.
However, the ratings could come under further pressure in case of (i) worsening of market trends in the automotive sector than our current expectations next year especially in Europe or beyond 2010; (ii) failure to redress EBITA margin level over the medium term with an intermediate step of around 1.5% next year as well as (iii) inability to reduce leverage (Debt/EBITDA) to a level materially lower than 4.5x by 2010 and (iv) failure to return to a positive free cash flow from 2010 onwards.
Valeo's liquidity profile remains solid, with a long dated maturity schedule. Liquidity is provided by sizable amounts of cash readily available, a comfortable amount of headroom under its committed high quality bilateral bank lines maturing in more than 1 year as well as operating cash flows.
These sources should cover all cash needs over the next 12 months arising from debt maturities, capital expenditures, working capital and day-to-day needs as well as dividend payments. The Ba2 rating incorporates the assumption that the solid liquidity profile will be maintained over the medium term thereby maintaining solid headroom under its financial covenants.
Downgrades:
..Issuer: Valeo
....Probability of Default Rating, Downgraded to Ba2 from Ba1
....Corporate Family Rating, Downgraded to Ba2 from Ba1
....Multiple Seniority Medium-Term Note Program, Downgraded to a range of Ba3 to Ba2 from a range of Ba2 to Ba1
....Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 from Ba1
Outlook Actions:
..Issuer: Valeo
....Outlook, Changed To Stable From Negative
.....
Moody's last rating action on Valeo was a downgrade to Ba1/Not Prime with a negative outlook from Baa3/Prime-3 on January 7, 2009.
Valeo S.A., headquartered in Paris, is one of the leading global suppliers of automotive components. Valeo generated total sales of € 3.5 billion in the first half 2009
....di fatto oggi psa 33 6% improvvisamente si è riempita la lettera....altre news
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