Our 'BBB-' issuer rating on Møller Mobility Group AS (Møller Mobility) is unchanged following the publication of its results for January-April 2021.
Despite strong results, competition affects market share
The results were broadly in line with our expectations, with record pre-tax profit of NOK 627m in the first four months, with higher revenues and EBITDA than in the corresponding period a year earlier, reflecting the net effect of the COVID-19 pandemic. Despite slower deliveries from factories, strong demand for cars was supported by high service revenues and increased operating efficiency. Deliveries before year-end 2020 reduced inventories going into 2021. Lower inventories and strong competition reduced Møller Mobility's market share to 19.4% from January to April 2021, from 31.6% for the same period last year. Market shares can be volatile during the year, but we expect Møller Mobility's market share to be around 20% over our forecast period.
We expect credit metrics to remain stable
As of 30 Apr. 2021, Møller Mobility's NCR-adjusted net debt/EBITDA remained solid at 1.6x, compared with our expectation of 1.9x for fiscal 2021, while NCR-adjusted EBITDA/net interest was 12.7x compared with our projection of 10.8x for the full year. We do not adjust our estimates at this point as we expect the company's credit metrics to reflect continued investment in the near future, as well as increased competition and margin pressure.
Figure 1. Møller Mobility key credit metrics, 2018-April 2021
| NOKm | 2018 | 2019 | 2020 | LTM to 30 Apr. 2021 |
|---|---|---|---|---|
| Total revenue | 26,173 | 30,561 | 33,017 | 33,224 |
| NCR-adjusted EBITDA | 1,632 | 2,126 | 2,246 | 2,468 |
| NCR-adjusted net debt | 4,454 | 6,030 | 3,064 | 3,856 |
| Total assets | 8,173 | 9,785 | 10,025 | 10,990 |
| NCR-adjusted net debt/EBITDA (x) | 2.7 | 2.8 | 1.4 | 1.6 |
| NCR-adjusted EBITDA/net interest (x) | 7.7 | 8.2 | 9.7 | 12.7 |
| NCR-adjusted FFO/net debt (%) | 27.6 | 26.2 | 53.4 | 48.4 |
| Based on company data. All metrics adjusted in line with NCR methodology. | ||||
This commentary does not constitute a rating action.
If you have any questions, please contact:
Mille O. Fjeldstad, credit rating analyst, +4799038916, mille.fjeldstad@nordiccreditrating.com
Geir Kristiansen, credit rating analyst, +4790784593, geir.kristiansen@nordiccreditrating.com