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Fitch Ratings Affirms Electrolux AB's Long-Term Issuer Default Rating

Friday, 16 Nov 2012 07:08am EST 

Fitch Ratings announced that it has affirmed Electrolux AB's long-term Issuer Default Rating (IDR) at 'BBB'. The outlook on the long-term IDR is negative. The negative outlook principally reflects Fitch's concern that Electrolux's financial profile, specifically its cash generation and leverage ratios, may not return to a level commensurate with a 'BBB' rating in the short term. While the Company has made positive progress during the first nine months of 2012 towards improving these metrics, enhancing the flexibility of its cost structure as well as its exposure to developing markets, it continues to face considerable challenges in its main markets and pressure from raw material prices. The ratings reflect the Company's market position as one of the main household and professional appliance manufacturers, especially in Europe, North America and Latin America. Electrolux's size, geographical diversification and conservative financial profile support the ratings, as does its liquidity position. However, the ratings continue to be constrained by the mature, cyclical and competitive nature of the European and North American appliance markets. Electrolux's exposure to fluctuating raw-material prices and foreign exchange rates are also weaknesses, as is its relatively limited free cash flow (FCF) generation. Furthermore, increasing competition from lower-cost emerging market producers may present a threat over the medium term, especially in lower-end product lines. 

Company Quote

0.41 +0.73%
24 Oct 2014