Creditreform Rating has adjusted the corporate issuer rating of Nestlé AG from AA to AA-. The outlook remains stable. With this rating, Nestlé continues to have very high creditworthiness and a very low risk of default. Significant factors that lead to the rating adjustment are the increased level of debt and the partially debt-financed share buybacks that have been carried out since 2017 and which have led to significant liquidity outflows, an unfavorable development in the capital structure, and consequently to a deterioration in the results of the key financial ratios analysis. We also consider a significant improvement in the capital structure to be unlikely over the period of the current share buyback program until the end of 2022. Nonetheless, due to the Group´s global market position with a well-diversified product and brand portfolio that is adequately further developed through a high level of innovation and promptly adapted to customer needs, and its well-developed internal financing power complemented by excellent access to the capital market, we do not see any risk to the economic and financial stability of the Nestlé Group. Its focus on high-growth and high-margin business areas, and the transformation process that has been implemented consistently, lead to short-term burdens but should enable the Nestlé Group to achieve its strategic growth targets in the medium to long term. Against the background of the dynamically developing COVID-19 pandemic and the resulting global recession, temporary business losses and delayed target achievement cannot be ruled out.
Creditreform Rating has carried out an unsolicited corporate rating of Nestlé AG.