Groupe Bruxelles Lambert SA

The stable outlook reflects our expectation that GBL will maintain a well-diversified and liquid portfolio made up of assets with an average credit quality well within the investment-grade range, while maintaining a conservative approach to its leverage. We expect this will translate into its S&P Global Ratings-adjusted LTV ratio remaining well below 20%. We could lower the rating if GBL's leverage increased materially from current levels, with the S&P Global Ratings-adjusted LTV ratio increasing to 20% or more for a prolonged period. This could, for example, result from: A steep decline in equity markets not offset by debt reduction; Higher investment commitments to Sienna or large debt-financed portfolio additions; or Increased debt at controlling shareholder Parjointco, which solely relies on

...Groupe Bruxelles Lambert SA (GBL) has a well-diversified, highly rated, and liquid portfolio, with some elements of concentration. As of Sept. 30, 2020, consumer goods made up about 36% of the portfolio, followed by industrials (including building materials and chemicals) at 28%, and business services at 22%. However, there are some elements of asset concentration, given that GBL's top-three assets represent about 47% of the total adjusted portfolio value, and its largest asset, Adidas, represents 18% as of Sept. 30, 2020. The portfolio is supported by investee assets' average low leverage and solid credit quality, which S&P Global Ratings assesses on a weighted-average basis as at '###+'. Additionally, about 80% of the adjusted portfolio consists of investments in listed assets. Despite COVID-19, GBL's portfolio has remained resilient and with only moderate pressure on dividend prospects. Throughout the pandemic, among the major investee companies owned by GBL, only Adidas completely cancelled...

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