All these companies have “excellent” or “strong” business risk profiles, according to Standard & Poor’s criteria, and we currently see no reason to revise these high scores, which have been successfully tested under challenging market conditions. The five with “excellent” business risk profiles, the highest of our six business risk categories, are:
-- Switzerland-based branded and packaged food manufacturer Nestle S.A. (AA/Stable/A-1+);
-- U.K.-Netherlands’-based Unilever (A+/Stable/A-1);
-- Belgium-based international brewer Anheuser-Busch InBev N.V./S.A. (ABI; A/Stable/A-1);
-- French cosmetics and personal care group L‘Oreal S.A. (--/--/A-1+); and
-- France-based food manufacturer Danone (A-/Stable/A-2).
The other five have “strong” business profiles, the second highest of our categories. They are the tobacco companies Philip Morris International Inc. (PMI; A/Stable/A-1), British American Tobacco PLC (BAT; A-/Stable/A-2), and Imperial Tobacco Group PLC (BBB/Stable/A-2), The Netherlands’-incorporated brewer Heineken N.V. (BBB+/Stable/A-2), and French luxury goods manufacturer and retailer LVMH Moet Hennessy Louis Vuitton S.A. (A/Positive/A-1).
“The financial risk profiles of these companies are boosted by high margins and relatively limited capital expenditures, although an appetite for debt-financed acquisitions and share buybacks can temporarily affect their financial profiles,” said Mr. Baudouin. “On the whole, though, we expect the credit quality on these 10 companies to remain resilient over the coming year.”