Research Update: Swedish Power Company Vattenfall Outlook Revised To Positive On Increased Financial Flexibility; Affirmed At 'BBB+'

Vattenfall's balance sheet has strengthened significantly in 2021, thanks notably to a series of materially positive one-off events, including the German nuclear settlement; the sale of Stromnetz Berlin, a German based distribution system operator (DSO); and the sale of 49.5% of Hollandse Kust Zuid offshore wind farm. We now anticipate credit ratios such as S&P Global Ratings-adjusted funds from operations (FFO) to debt in the 30%-35% range in 2022-2023, which is significantly higher than our previous expectations of 20%-25% and gives Vattenfall ample flexibility to deliver on its strategy; we anticipate stronger credit metrics can be sustained despite the group's ambitious investment plan. Vattenfall intends to invest SEK57 billion (€5.7 billion) over 2021-2022, up from about SEK48 billion over 2019

...- Vattenfall's balance sheet has strengthened significantly in 2021, thanks notably to a series of materially positive one-off events, including the German nuclear settlement; the sale of Stromnetz Berlin, a German based distribution system operator (DSO); and the sale of 49.5% of Hollandse Kust Zuid offshore wind farm. - We now anticipate credit ratios such as S&P Global Ratings-adjusted funds from operations (FFO) to debt in the 30%-35% range in 2022-2023, which is significantly higher than our previous expectations of 20%-25% and gives Vattenfall ample flexibility to deliver on its strategy; we anticipate stronger credit metrics can be sustained despite the group's ambitious investment plan. - Vattenfall intends to invest SEK57 billion (5.7 billion) over 2021-2022, up from about SEK48 billion over 2019 and 2020 combined. We expect investments to be elevated through 2023, gradually leading to a rapid increase in the group's share of renewable and distributions earnings. - As a result,...

Research Update