Mars Inc.

The stable outlook on Mars reflects our expectation that the company will maintain adjusted leverage in the 2x-2.5x range over the next 12-24 months, even with our expectation for continued acquisitions in pet veterinary hospitals or healthy snacking. We could lower our rating on Mars if it sustained leverage of more than 3x. This could occur if: The company pursued more aggressive financial policies, including undertaking another large acquisition before reducing its debt balance; Operating performance deteriorated due to market share losses or unfavorable consumer demand trends, especially in the higher-margin Mars Wrigley segment; or Mars could not execute its plan to invest in the business and innovate its portfolio to increase revenue or if its margins became pressured due

...The pet services segment should prove resilient and continue to generate organic revenue growth due to favorable industry trends. Mars Inc.'s long-term strategy as a global consolidator and leader in the pet veterinary hospital industry has led to consistent acquisitions annually. This segment has fueled top-line growth, well above Mars' consumer products portfolio. Pet hospitals remained largely open during the pandemic because they are deemed essential services. We believe growth will resume at higher levels after the pandemic given the increase in pet ownership. The pet and human food segments will continue to grow while the confection segment will remain soft. We expect Mars' pet food portfolio will continue to drive organic revenue growth in the mid-single-digit percentage area for the company even after the pandemic subsides. This further demonstrates the humanization of pets and the resiliency of demand for pet food. We also expect the human food segment to remain elevated as consumers...

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