Nordic Credit Rating (NCR) said today that it had assigned a 'BBB-' long-term issuer rating to Norway-based car importer and retailer Møller Mobility Group AS (Møller Mobility). The outlook is stable. At the same time NCR assigned an 'N-1+' short-term issuer rating. NCR has also assigned 'BBB-' issue ratings to Møller Mobility's senior unsecured bonds.
The long-term rating reflects the company's strong position in its core market. It is further supported by the company's close relationship over almost 75 years with car manufacturer Volkswagen AG, which provides scale and diversification through a range of brands, and the joint venture Volkswagen Møller Car Finance. The rating is also underpinned by the company's moderate financial leverage and strong cash position, supported by unutilised credit facilities.
The rating is constrained by the company's operating environment. It is a cyclical industry undergoing rapid change through the development of low-emissions vehicles, which could potentially affect the industry's structure. The company's large off-balance-sheet repurchase portfolio, with a maturity profile of less than two years, could materially affect the company's short-term liquidity and potentially result in losses should the market experience rapid deterioration.
The stable outlook reflects our expectation that Møller Mobility will maintain its market-leading position in its geographical segments and benefit from an economic recovery on the back of increased vaccination against COVID-19 and the easing of pandemic-related restrictions by mid-2021 in its core markets. It also reflects our expectation that Volkswagen will continue to deliver popular models of cars in a timely matter.
We could raise the rating to reflect outperformance of our expectations reflected in adj. net debt/EBITDA of below 2.0x and EBITDA/adj. net interest above 15x, increased diversification of revenue and risk or reduced risk appetite, including a more stringent financial policy. We could lower the rating to reflect loss or reduced number of licences from Volkswagen, supply chain issues affecting Møller Mobility's revenue and brand or long-term deterioration of market position.
|Long-term issuer credit rating:||BBB-|
|Short-term issuer credit rating:||N-1+|
|Senior unsecured issue rating:||BBB-|
If you have any questions, please contact:
Mille O. Fjeldstad, credit rating analyst, +4799038916, firstname.lastname@example.org
Geir Kristiansen, credit rating analyst, +4790784593, email@example.com
The methodology documents used for this rating are NCR's Corporate Methodology published on 14 Aug. 2018 and NCR's Rating Principles published on 16 Sep. 2019. For the full regulatory disclaimer please see the rating report.