Standard & Poor's gives BBB credit rating to Pernod Ricard, cites company's 'excellent' business risk profile, solid free cash flow generation; outlook stable

NEW YORK , April 13, 2012 (press release) – CREDIT RATING: BBB-/Stable/A-3 Country: France

Primary SIC: Wines, brandy,

and brandy


Mult. CUSIP6: 714264

Credit Rating History:

Local currency Foreign currency

03-Oct-2011 BBB-/A-3 BBB-/A-3

17-Nov-2006 BB+/B BB+/B


The ratings on French spirits producer Pernod Ricard S.A. (Pernod) reflect Standard & Poor's Ratings Services' view of its "excellent" business risk profile, which is supported by its No. 2 position in the stable and cash-generative global-branded spirits market, and its solid free cash flow generation. The ratings further factor in our opinion that the group's financial policy is in line with an investment-grade rating. However, our view of Pernod's financial risk profile as "aggressive" continues to constrain the ratings, and reflects a debt-to-EBITDA ratio of more than 4.0x, following a series of transformative and primarily debt-funded acquisitions over the past decade.

S&P base-case operating scenario

We believe that Pernod will continue to deliver sound performances, with mid-to-high single digit organic growth in revenues, and stable EBITDA margins, at least, in 2012.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.