Novabev Group rating upgraded to ruAA by Expert RA agency

Expert RA, Russia's largest rating agency, has upgraded Novabev Group's credit rating to ruAA with a stable outlook. Previously, the rating was ruAA- with a same outlook.

The official statement of Expert RA informs that the credit rating of Novabev Group is conditioned by a restrained assessment of the industry’s risk profile, moderately strong market and competitive positions, strong margin indicators, low debt burden, high valuation of liquidity and low level of corporate risks.

In turn, the rating upgrade was driven by improved financial performance, resulted from effective working capital management. It is noted that the company is characterized by high localization of its production, which allows maintaining high operational performance in the current macroeconomic and geopolitical environment. The agency emphasizes that Novabev Group has a diversified brand portfolio, which ensures presence in all major market segments both in terms of price and category of alcoholic beverages. Positions in the sales markets are assessed as strong in the production and distribution segment, as the company holds leading positions in the production of spirits in Russia, focusing mainly on premium brands, and moderately strong in the retail segment due to its presence in several regions. The outlook for liquidity is also positive: sufficient expected operating cash flow over the next 12 months, a significant free cash balance and available credit line limits cover planned repayment and debt service costs, the implementation of the investment program and dividend payments. The agency notes that the positive dynamics of the company's financial indicators has been maintained during the reporting period, as well as margins have been kept at a high level due to the company's focus on premium segments. The exposure to market risks is considered by the agency to be minimal. The quality of corporate governance and the level of information transparency are highly rated.