Creditreform Rating has affirmed the unsolicited corporate issuer rating of Compagnie Financière Richemont SA as well as the unsolicited corporate issuer rating of Richemont International Holding SA at A. Creditreform Rating has also affirmed the unsolicited corporate issue rating of the long-term local currency senior unsecured notes issued by Richemont International Holding SA at A. These issues are included in the list of ECB-eligible marketable assets, which can be found on the ECB's website. The outlook for the ratings remains positive. For more details regarding the ratings, please refer to our rating report below.
Creditreform Rating (CRA) has affirmed the unsolicited corporate issuer rating of A for Compagnie Financière Richemont SA, hereinafter also referred to as Richemont. The outlook was changed from stable to positive.
The rating decision is based on the fact that Richemont ultimately demonstrated satisfactory earnings, good operating cash flow, sufficient financial resources and a stable earnings development in our financial ratio analysis for the 2020/2021 financial year, despite a temporary significant decline in sales in the last financial year. The positive outlook is based on the very strong rebound so far in the current financial year, with the financial position and internal financing strength remaining solid. The market position among the TOP 3 suppliers of luxury goods worldwide has not changed.
Creditreform Rating has set the initial unsolicited corporate issuer rating of Compagnie Financière Richemont SA at A with a stable outlook. This unsolicited corporate issuer rating confirms that Richemont possess a high level of creditworthiness, which represents a low risk of default. Our rating is based on Richemont's leading position in the global luxury market and its strong, high-value brand portfolio. Even if the group posted a comparatively subdued annual result for the last financial year, the results of our key financial figures analysis have indicated a very stable and solid level over the past few years. Despite a noticeable slump in business in the first half of the current financial year 2021, the company's solid qualitative and quantitative fundamentals represent a good starting point for overcoming the challenges and uncertainties that are currently emerging from the COVID-19 pandemic for the luxury goods industry. Nevertheless, the rating level includes the limited headroom based on the financial figures of the 2020 business year. This is in light of Richemont's weaker credit metrics that we expect for the financial year 2021. We assume that the global pandemic situation will recover slowly in 2021 and that the most important markets for the luxury industry will return to a growth trend. In particular the Chinese market, which was affected first by the pandemic, is already showing satisfactory developments again.