Nordic Credit Rating (NCR) has revised the outlook on its 'A-' long-term issuer rating on Norway-based NorgesGruppen to stable from negative. The long-term rating and 'N2' short-term issuer rating have been affirmed, as was the 'A-' senior unsecured issue rating.
Rating rationale
The outlook revision reflects improved visibility on NorgesGruppen ASA’s post-acquisition capital structure and operating trajectory following its acquisition of Norsk Medisinaldepot AS (NMD) on 30 Jan. 2026. Although leverage has increased somewhat due to the transaction, we expect net debt/EBITDA to trend down to 2.2x in 2028, supported by stable EBITDA margins and synergy realisation. We have revised our assessment of size and diversification to reflect more diverse product offerings and increased scale. We view the acquisition of NMD as well considered and consistent with the company’s established operational profile and risk appetite.
The rating also reflects the company's leading position in the domestic retail grocery sector and its high levels of horizontal and vertical integration. Moreover, it reflects the company's stable margins, which are largely due to economies of scale and its advantageous negotiating position with suppliers. NorgesGruppen has shown resilience to challenging market conditions and maintained its EBITDA margin despite rising costs over recent years. The company consequently has a long track record of stable key metrics in a now more volatile macroeconomic environment, which supports our view of the low cyclicality of its business.
The rating is constrained by NorgesGruppen's financial leverage, which is primarily driven by long-term leases but remains moderate thanks to robust and stable cash flows. We consider that the company has low risk appetite and a strong liquidity position, factors which support our financial risk assessment. We also believe that the long-term owners will keep the company's risk appetite under control.
Stable outlook
The stable outlook reflects our expectation that NorgesGruppen's credit metrics will improve after a moderate increase in leverage in early 2026 due to the NMD acquisition. In our view, the positive contribution of NMD's business profile, established market position and stable operating efficiency outweigh the temporary uptick in leverage. The outlook is also supported by the company's low sensitivity to economic fluctuations, stable margins and robust business model.
An upgrade is unlikely at this point given our already strong assessment of NorgesGruppen's business risk.
We could lower the rating to reflect net debt/EBITDA above 3x and FFO/net debt below 25% over a sustained period, weakened market fundamentals, leading to an EBITDA margin below 8% over a protracted period, or new legislation that erodes market position or profitability.
| Rating list | To | From |
|---|---|---|
| Long-term issuer credit rating: | A- | A- |
| Outlook: | Stable | Negative |
| Short-term issuer credit rating: | N2 | N2 |
| Senior unsecured issue rating: | A- | A- |
Contacts:
Christian Yssen, analyst, +4740019900, christian.yssen@nordiccreditrating.com
Anine Gulbrandsen, analyst, +4797501657, anine.gulbrandsen@nordiccreditrating.com
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@nordiccreditrating.com
The methodology documents used for this rating are NCR's Corporate Rating Methodology published on 8 May 2023, NCR's Rating Principles published on 14 Feb. 2024 and NCR's Group and Government Support Rating Methodology published on 14 Feb. 2024. For the full regulatory disclaimer please see the rating report.