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Il downgrade di S&P su British Telecom dopo la vicenda, già narrata in precedenza della divisione BT Global Services, la cui ristrutturazione farà sì, secondo l'agenzia, che occorranno un paio di anni, ben che vada, per il ritorno ai livelli di generazione di cash del 2007.
Sempre secondo S&P, BT disporrebbe comunque di una serie di strumenti - dalla riduzione del dividendo al taglio del capex - per impedire un ulteriore deterioramento del proprio profilo di rischio finanziario nel breve termine, mentre vara la ristrutturazione di Global Services.
BT Group PLC Long-Term Rating Lowered To 'BBB' From 'BBB+' On Weak Cash Flow, S-T 'A-2' Rating Affirmed; Outlook Stable
LONDON (Standard & Poor's) March 31, 2009--Standard & Poor's Ratings Services said today that it lowered its long-term corporate credit rating on leading U.K. telecommunications provider BT Group PLC (BT), along with its long-term corporate credit rating and senior unsecured debt ratings on wholly owned subsidiary British Telecommunications PLC, to 'BBB' from 'BBB+'. At the same time, the 'A-2' short-term ratings on BT and British Telecommunications were affirmed. In addition, Standard & Poor's removed the ratings from CreditWatch, where they were placed with negative implications on Jan. 22, 2009. The outlook is stable.
"The downgrade reflects our view that BT's free operating cash flow (FOCF) generation will be substantially lower in financial 2009 than we had previously expected. This is primarily a result of underperformance at its BT Global Services division, which we consider to be an important support to BT's rating in the future," said Standard & Poor's credit analyst Michael O'Brien.
As a consequence, BT's consolidated EBITDA margin and leverage metrics have weakened noticeably. In our opinion, given the weaker-than-expected performance at BT Global Services, it will take at least one to two years for the group's FOCF generation to return to the levels of 2007 and 2008.
This is before taking into account restructuring charges booked in financial 2009. These charges were largely related to the turnaround of BT Global Services, ongoing leaver costs, and likely pension scheme deficiency payments resulting from the company's triennial pension review, which could weigh negatively on BT's financial profile.
"At the same time, we consider that BT has a number of options to preserve its intermediate financial risk profile before it weakens further, including the potential to modify dividends or to defer--or reduce--capital
expenditures as it sees fit," said Mr. O'Brien.
"The stable outlook reflects our expectation that the group could stabilize the performance of BT Global Services over the next two years."
In addition, we expect BT to continue to implement cost savings in other parts of its business to protect margins and improve cash flow generation after pension deficit payments and other restructuring-type payments. We also believe that the outlook could remain stable if BT shows medium-term progress in reducing adjusted leverage levels to more sustainable levels for the longer term.
This would be the case, for example, if BT were able to reduce adjusted debt to EBITDA to about 3.0x from the current 3.4x, and maintain funds from operations to debt of about 25%.
"In addition, we believe that at its current rating level, we anticipate that BT should generate positive discretionary cash flow (after dividends and any pension payments) in financial year 2009-2010,"said Mr. O'Brien.
We consider that credit metrics will remain weak for the ratings in the near term given depressed EBITDA and likely adverse pension deficit movements.
Downward pressure on the ratings could develop if competitive intensity were to result in a persistent negative EBITDA trend that is not sufficiently offset by resilience in the group's market positions and notable progress towards positive cash flow generation at BT Global Services.
Furthermore, downward pressure could arise if the group's discretionary cash flows were to become persistently negative after financial 2009.
Given the operating pressures on BT and its financial policy to date,
upside potential is unlikely in the near term in the absence of a marked
upturn in operating cash flow generation and a more conservative balance sheet and financial policy
Sempre secondo S&P, BT disporrebbe comunque di una serie di strumenti - dalla riduzione del dividendo al taglio del capex - per impedire un ulteriore deterioramento del proprio profilo di rischio finanziario nel breve termine, mentre vara la ristrutturazione di Global Services.
BT Group PLC Long-Term Rating Lowered To 'BBB' From 'BBB+' On Weak Cash Flow, S-T 'A-2' Rating Affirmed; Outlook Stable
LONDON (Standard & Poor's) March 31, 2009--Standard & Poor's Ratings Services said today that it lowered its long-term corporate credit rating on leading U.K. telecommunications provider BT Group PLC (BT), along with its long-term corporate credit rating and senior unsecured debt ratings on wholly owned subsidiary British Telecommunications PLC, to 'BBB' from 'BBB+'. At the same time, the 'A-2' short-term ratings on BT and British Telecommunications were affirmed. In addition, Standard & Poor's removed the ratings from CreditWatch, where they were placed with negative implications on Jan. 22, 2009. The outlook is stable.
"The downgrade reflects our view that BT's free operating cash flow (FOCF) generation will be substantially lower in financial 2009 than we had previously expected. This is primarily a result of underperformance at its BT Global Services division, which we consider to be an important support to BT's rating in the future," said Standard & Poor's credit analyst Michael O'Brien.
As a consequence, BT's consolidated EBITDA margin and leverage metrics have weakened noticeably. In our opinion, given the weaker-than-expected performance at BT Global Services, it will take at least one to two years for the group's FOCF generation to return to the levels of 2007 and 2008.
This is before taking into account restructuring charges booked in financial 2009. These charges were largely related to the turnaround of BT Global Services, ongoing leaver costs, and likely pension scheme deficiency payments resulting from the company's triennial pension review, which could weigh negatively on BT's financial profile.
"At the same time, we consider that BT has a number of options to preserve its intermediate financial risk profile before it weakens further, including the potential to modify dividends or to defer--or reduce--capital
expenditures as it sees fit," said Mr. O'Brien.
"The stable outlook reflects our expectation that the group could stabilize the performance of BT Global Services over the next two years."
In addition, we expect BT to continue to implement cost savings in other parts of its business to protect margins and improve cash flow generation after pension deficit payments and other restructuring-type payments. We also believe that the outlook could remain stable if BT shows medium-term progress in reducing adjusted leverage levels to more sustainable levels for the longer term.
This would be the case, for example, if BT were able to reduce adjusted debt to EBITDA to about 3.0x from the current 3.4x, and maintain funds from operations to debt of about 25%.
"In addition, we believe that at its current rating level, we anticipate that BT should generate positive discretionary cash flow (after dividends and any pension payments) in financial year 2009-2010,"said Mr. O'Brien.
We consider that credit metrics will remain weak for the ratings in the near term given depressed EBITDA and likely adverse pension deficit movements.
Downward pressure on the ratings could develop if competitive intensity were to result in a persistent negative EBITDA trend that is not sufficiently offset by resilience in the group's market positions and notable progress towards positive cash flow generation at BT Global Services.
Furthermore, downward pressure could arise if the group's discretionary cash flows were to become persistently negative after financial 2009.
Given the operating pressures on BT and its financial policy to date,
upside potential is unlikely in the near term in the absence of a marked
upturn in operating cash flow generation and a more conservative balance sheet and financial policy
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