Standard & Poor’s and Fitch Ratings have granted El Corte Inglés an investment grade rating for the first time in its historydriven by the group’s results in the 2023-2024 financial year and the effort made by the company to reduce debt in recent years and its “solid” financial flexibility.
Specifically, both agencies have given the group chaired by Marta Álvarez a BBB- investment grade credit rating, with a stable outlook, highlighting the size of the company, its relevance in Spain, the leadership and strength of the brand, the diversification of businesses and categories; its omnichannel offering and a portfolio of unique real estate assets in the best locations in the main Spanish and Portuguese cities.
It’s a statement, S&P highlighted that El Corte Inglés registered “a strong growth momentum” in the fiscal year that ended on February 29.and the group achieved a debt to gross operating profit (Ebitda) of less than three times and funds from operations (FFO) to borrow more than 30%.
Thus, the agency believes that the retail giant will at least maintain these metrics, “thanks to the significant reduction in debt in the last two years,” as well as the forecast that the agency gives to the Ebitda group and the generation of cash flow. stable cash flow and a gradual return to dividends.
The rating agency expects that El Corte Inglés will maintain its prudent financial policy and that leverage will remain below three times.
“In our view, El Corte Inglés’ improved profitability and leverage, together with a clear financial policy commitment, support an investment grade rating,” he said.
Regarding the ‘stable’ outlook, S&P estimated that it reflects its view that the group will maintain “a conservative financial policy which will allow it to maintain adjusted debt over Ebitda below 3 times and FFO over debt above 30% over the next 18 to 24 months.”
For its part, Fitch indicated that its rating reflects “the solid market position and business diversification” of El Corte Inglés in multiple segments of the Spanish retail market, as well as “solid financial flexibility provided by its largely real estate asset base.” free of charges and its comfortable liquidity.”
The El Corte Inglés Group closed the 2023-2024 financial year (as of February 29) with a global revenue volume of 16,333 million euroswhich represents an increase of 5.4% compared to the previous year, while its recurring net profit shot up by 73.7%, up to 359 million euros, the highest achieved by the company since 2009.
The net profit, for its part, stood at 480 million euros, a figure lower than that of the previous year due to the absence of the extraordinary income generated by the operation with Mutua, as reported by the group this Tuesday.
Likewise, Ebitda amounted to 1,081 million, with an increase of 13.6% over the previous year, while the net financial debt was at the lowest level in the last 16 years, with 2,059 million euros, equivalent to 1 .9 times the company’s Ebitda.
El Corte Inglés has highlighted that in the 2023-2024 financial year it has achieved the best ordinary results since 2009 with growth in the main areas of activity.
