Research Update: Peer Holding III B.V. Outlook Revised To Positive From Negative On Resilient Operating Performance; Ratings Affirmed

Value retailer Action (an operating subsidiary of Peer Holding III B.V.) has shown strong resilience in 2020 and 2021 to date, despite store closures during COVID-19-induced lockdowns in Europe, with about 10% revenue growth last year driven by ongoing store expansion and accompanied by stable profitability. The company has beaten our expectations and we expect leverage to decrease toward 4.0x over the next two years, from 4.7x in 2020, absent any dividend recapitalization that could increase leverage to about 5.0x. We are therefore revising the outlook to positive from negative on Action's parent Peer Holding III B.V. and affirming our 'B+' long-term issuer credit rating. The positive outlook reflects the possibility of an upgrade once current COVID-19-related uncertainty abates and

...- Value retailer Action (an operating subsidiary of Peer Holding III B.V.) has shown strong resilience in 2020 and 2021 to date, despite store closures during COVID-19-induced lockdowns in Europe, with about 10% revenue growth last year driven by ongoing store expansion and accompanied by stable profitability. - The company has beaten our expectations and we expect leverage to decrease toward 4.0x over the next two years, from 4.7x in 2020, absent any dividend recapitalization that could increase leverage to about 5.0x. - We are therefore revising the outlook to positive from negative on Action's parent Peer Holding III B.V. and affirming our 'B+' long-term issuer credit rating. - The positive outlook reflects the possibility of an upgrade once current COVID-19-related uncertainty abates and if operating performance remains robust, debt to EBITDA stays less than 5.0x, and the company and its owners continue with the historical financial policy of S&P Global Ratings-adjusted leverage not...

Research Update