Bayer: S&P confirms 'BBB' rating
(CercleFinance.com) - On Thursday ratings agency S&P maintained Bayer's "BBB" credit rating, saying that the German healthcare-chemicals giant's profitability should improve "markedly" over the next two years.
S&P estimates that the upcoming disposals of businesses will be used to repay debt, enabling the group to reach adjusted debt leverage of about 3.8x at end-2019 and about 3.2x at end-2020.
Despite rising US litigation risks related to glyphosate-based herbicide products and the ongoing cost efficiency program, Bayer should generate between 3.5 billion euros and 4.5 billion euros of free operating cash flow (FOCF) annually, the agency also said.
"This is thanks to the stable operating performance supported by a strong increase in profitability in CropScience and reducing Monsanto integration costs," S&P noted.
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S&P estimates that the upcoming disposals of businesses will be used to repay debt, enabling the group to reach adjusted debt leverage of about 3.8x at end-2019 and about 3.2x at end-2020.
Despite rising US litigation risks related to glyphosate-based herbicide products and the ongoing cost efficiency program, Bayer should generate between 3.5 billion euros and 4.5 billion euros of free operating cash flow (FOCF) annually, the agency also said.
"This is thanks to the stable operating performance supported by a strong increase in profitability in CropScience and reducing Monsanto integration costs," S&P noted.
Copyright (c) 2019 CercleFinance.com. All rights reserved.