Woolworths Group Ltd. - S&P Global Ratings’ Credit Research

Woolworths Group Ltd.

Woolworths Group Ltd. - S&P Global Ratings’ Credit Research
Woolworths Group Ltd.
Published Mar 22, 2021
17 pages (5819 words) — Published Mar 22, 2021
Price US$ 500.00  |  Buy this Report Now

About This Report

  
Abstract:

The stable outlook reflects our expectation that Woolworths will continue to mitigate competitive pressures on its revenue growth and margins over the next 12-24 months, and make progress on its operational and strategic initiatives. We believe the company is committed to protecting its credit quality at the 'BBB' rating level. In addition, we anticipate management will continue to operate with sufficient headroom within its financial policies, such that its ratio of lease-adjusted debt to EBITDA is less than 3.75x. We also expect Woolworths' capital structure, following the potential separation of the EG, is likely to remain consistent with our expectations for a 'BBB' rating. We could lower the ratings if we believe loss of market share or margin erosion at

  
Brief Excerpt:

...Woolworths Group Ltd.'s proposed divestment of its high-margin liquor and hotel business will reduce the group's scale and diversity. We believe the group is well placed to deal with the complexities around the separation of Endeavour Group (EG; comprising the Endeavour Drinks and hotels business). Woolworths' current credit metrics have considerable rating headroom. However, uncertainty remains in relation to the capital structure following the separation. We will seek to understand the ongoing linkages with EG and the resulting impact on Woolworths' earnings profile post the separation. Woolworths' future capital structure, including total operating lease obligations, and management's financial stance will frame our assessment of its credit quality. Stimulus-driven consumer spending and increased home consumption in Australia are likely to moderate through the fiscal year ending June 2021. We anticipate sales growth for Woolworths' Australian food division for the remainder of fiscal...

  
Report Type:

Full Report

Ticker
WOW@AU
Issuer
GICS
Food Retail (30101030)
Sector
Global Issuers
Country
Region
Pacific
Format:
PDF Adobe Acrobat
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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Woolworths Group Ltd." Mar 22, 2021. Alacra Store. May 23, 2025. <http://www.alacrastore.com/s-and-p-credit-research/Woolworths-Group-Ltd-2615057>
  
APA:
S&P Global Ratings’ Credit Research. (). Woolworths Group Ltd. Mar 22, 2021. New York, NY: Alacra Store. Retrieved May 23, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/Woolworths-Group-Ltd-2615057>
  
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