Controladora Mabe, S.A. de C.V.

The stable outlook on Mabe reflects our expectations that over the next twelve months, the company will keep protecting its key credit metrics. We expect Mabe will not only maintain a debt-to-EBITDA ratio below 3.0x, but will also keep its FOCF-to-debt ratio above 15%, even considering the seasonality of cash flow. Although Mabe will make dividend payments this year of about $20 million, we expect the company to maintain its financial discipline and to make additional debt repayments as its cash flow permits. We could lower the ratings on Mabe in the next twelve months if the company deviates from its leverage and cash flow targets, with a debt-to-EBITDA ratio consistently exceeding 3.0x. A FOCF-to-debt ratio consistently below 10% would

...Mabe's geographic diversification and leading market position protect its profitability. Mabe has market presence in Mexico, the U.S., Canada, Central America, and South America. The company also has a diversified product portfolio that spans the full socioeconomic spectrum. Such diversification helps Mabe mitigate economic cycles and meet its profitability objectives. The company's EBITDA margins have generally remained near 9% for several years. Mabe also benefits from strong brand recognition in the markets where it operates, and has a long track-record as a preferred supplier for home appliance products under the GE brand in North America, which represented almost 60% of its total revenues last year. Chart 1 details the breakdown of Mabe's net sales for 2018....

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