Research Update: Compania Cervecerias Unidas S.A. 'BBB' Ratings Affirmed Despite Higher Leverage; Outlook Stable

Chile-based beverage company Compañía de Cervecerías Unidas S.A. (CCU) reported lower margins and higher leverage for two quarters in a row, with deteriorating credit metrics and overall financial profile. Still, overall credit quality and forecast credit metrics remain aligned with the company's rating category. On Nov. 28, 2022, S&P Global Ratings affirmed its 'BBB' issuer credit and issue-level ratings on CCU. The stable outlook reflects the company´s robust brand equity and a strong market share that supports sales volumes. We expect margins will gradually recover, along with a net leverage reduction. We expect an EBITDA margin of about 13.5% in 2022 and about 14.5% in 2023, as well as net leverage of 1.8x in 2022, falling to 1.5x in 2023.

...- Chile-based beverage company Compa±fa de Cervecerfas Unidas S.A. (CCU) reported lower margins and higher leverage for two quarters in a row, with deteriorating credit metrics and overall financial profile. Still, overall credit quality and forecast credit metrics remain aligned with the company's rating category. - On Nov. 28, 2022, S&P Global Ratings affirmed its '###' issuer credit and issue-level ratings on CCU. - The stable outlook reflects the company¦s robust brand equity and a strong market share that supports sales volumes. We expect margins will gradually recover, along with a net leverage reduction. We expect an EBITDA margin of about 13.5% in 2022 and about 14.5% in 2023, as well as net leverage of 1.8x in 2022, falling to 1.5x in 2023. We also expect negative free operating cash flow (FOFC) in 2022, turning positive in 2023....

Research Update