Summary: Hema B.V.

Strong position and brand recognition in a niche market in Belgium, the Netherlands, and Luxembourg (Benelux). Limited geographic diversification but an increasing omni-channel and international presence. Successful turnaround resulting in improving profitability and like-for-like growth. Fierce competition from discounters and internet pure players in the non-food segment. High seasonality and cyclicality given the dependence on discretionary consumer spending. A stable capital structure with extended maturities of substantial debt after the refinancing in 2017. Significant investments and interest burden that constrain free cash generation. High financial leverage with the S&P Global Ratings-adjusted debt-to-EBITDA ratio at around 6.5x in 2018. The stable outlook on Netherlands-based general merchandise retailer Hema B.V. reflects S&P Global Ratings' expectation that Hema's management will continue to improve

...Business Risk: Weak Financial Risk: Highly leveraged + Strong position and brand recognition in a niche market in Belgium, the Netherlands, and Luxembourg (Benelux). + Limited geographic diversification but an increasing omni-channel and international presence. + Successful turnaround resulting in improving profitability and like-for-like growth. + Fierce competition from discounters and internet pure players in the non-food segment. + High seasonality and cyclicality given the dependence on discretionary consumer spending. + A stable capital structure with extended maturities of substantial debt after the refinancing in 2017. + Significant investments and interest burden that constrain free cash generation. + High financial leverage with the S&P Global Ratings-adjusted debt-to-EBITDA ratio at around 6.5x in 2018....

Summary