Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
AND SCROLL DOWN!
By clicking “I AGREE” [at the end of this document],
you indicate that you understand and intend these terms and conditions to be
the legal equivalent of a signed, written contract and equally binding, and
that you accept such terms and conditions as a condition of viewing any and all
Moody’s information that becomes accessible to you [after clicking “I AGREE”] (the
“Information”). References herein to “Moody’s” include Moody’s
Corporation, Inc. and each of its subsidiaries and affiliates.
Terms of One-Time Website Use
you have entered into an express written contract with Moody’s to the contrary,
you agree that you have no right to use the Information in a commercial or
public setting and no right to copy it, save it, print it, sell it, or publish
or distribute any portion of it in any form.
acknowledge and agree that Moody’s credit ratings: (i) are current opinions of
the future relative creditworthiness of securities and address no other risk; and
(ii) are not statements of current
or historical fact or recommendations to purchase, hold or sell particular
securities. Moody’s credit ratings and
publications are not intended for retail investors, and it would be reckless
and inappropriate for retail investors to use Moody’s credit ratings and
publications when making an investment decision. No
warranty, express or implied, as the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any Moody’s credit
rating is given or made by Moody’s in any form whatsoever.
3. To the extent permitted by law, Moody’s and its directors,
officers, employees, representatives, licensors and suppliers disclaim
liability for: (i) any indirect, special, consequential, or incidental losses
or damages whatsoever arising from or in connection with use of the
Information; and (ii) any direct or compensatory damages caused to any person
or entity, including but not limited to by any negligence (but excluding fraud
or any other type of liability that by law cannot be excluded) on the part of
Moody’s or any of its directors, officers, employees, agents, representatives,
licensors or suppliers, arising from or in connection with use of the
4. You agree to read [and
be bound by] the more detailed disclosures regarding Moody’s ratings and the
limitations of Moody’s liability included in the Information.
5. You agree that any disputes relating to this agreement or your use of
the Information, whether sounding in contract, tort, statute or otherwise,
shall be governed by the laws of the State of New York and shall be subject to
the exclusive jurisdiction of the courts of the State of New York located in
the City and County of New York, Borough of Manhattan.
02 Aug 2001
MOODY'S ASSIGNS Baa2 TO MICHELIN PARENT COMPANY AND Baa1 ISSUER RATINGS TO TWO SUBSIDIARIES OF THE MICHELIN GROUP
First Time Rating
Frankfurt, August 02, 2001 -- Moody's Investors Service today assigned its Baa1 long-term issuer
rating and Prime-2 short-term issuer rating to Compagnie
Financiere Michelin (Switzerland) and Manufacture Francaise des Pneumatiques
Michelin (France) and its Baa2 long-term issuer rating and Prime-2
short-term issuer rating to Compagnie Generale des Etablissements
Michelin (France), the parent company. The outlook for the
ratings is stable.
The ratings reflects i) Michelin's leading world-wide market positions
and technological know-how with significant diversification along
product lines and regions, ii) its good quality and tire performance
record as well as iii) the group's strong financing arrangements and risk
minimization strategies. The family ownership background and the
life time appointment and unlimited liability of its managing partners
ensure long term orientation and the continued strong focus on managing
operating risks conservatively. However, the rating also
recognizes i) the competitive industry environment with significant price
pressures and the continued need to improve efficiency, ii) the
exposure to the depressed truck market, which has been a significant
profit contributor to the Michelin group's results and iii) the steady
increase in leverage reflecting significant investments and organic growth
over the past three years. As capital increases are not the preferred
financing alternative, the group will have to use a measured approach
to growth and rely on a mix of cash flow retention and external debt to
maintain its own gearing target of 1.0 to 1.3 times (net
debt/equity). The rating does not include major debt financed acquisitions
reflecting Michelin's focused tire strategy, the level of consolidation
in the tire industry as well as potential anti-trust issues and
the company's own return requirements.
Michelin commands leading or strong positions in most of the relevant
tire markets (except Japan) including Europe, North America and
South America and offers a full product range from passenger to truck
and speciality tires (agricultural, earthmovers, aviation,
two wheelers). Despite its exclusive focus on tires the group benefits
from geographical diversification as well as the dual end market structure
of OEM automotive and replacement. The effect of cyclical developments
in the OEM automotive industry is mitigated by its relatively small share
in the overall tire market (roughly 25%) as well as the typically
lower profitability of this segment reflecting the strong purchasing power
of the OEMs. Replacement markets, on the other hand,
provide moderate, but fairly stable growth opportunities (average
of 2-3% p.a.) and higher margins, which
relate to the less dominant customer structure and the higher service
element in the truck market. Nonetheless, in the near term
a continued economic weakening will most likely affect OEM as well as
replacement markets, in particular the truck segment and result
in margin pressures and lower profitability.
Moody's expects that Michelin will continue its marketing efforts to improve
its positioning in the higher value-added segments of the passenger
markets. Michelin's leading brand equity and world-wide
brand recognition as well as the high loyalty - and customer satisfaction
rate should support the initiative. The company's strong organic
growth rates give evidence of the improved marketing concept implemented
over the last three years. In the truck market, the higher
service-orientation fosters long-term customer relations
and loyalty. Nonetheless, Moody's anticipates that Michelin
will need to vigorously defend its leading positioning against competitors
in the European markets and will at the same time face significant obstacles
and competitive pressures to increase market share especially in the North
American truck market.
Moody's considers Michelin's strong focus and commitment on maintaining
technology and quality leadership as one of its key strengths.
The competitive advantage, which has further increased in importance
since the latest tire recalls, is evidenced by Michelin's good tire
track record and the large number of innovations developed by Michelin
over the years (including the new PAX systems). In view of rising
product liability and warranty claims Moody's expects Michelin to continue
its comprehensive quality assurance programs to avoid problems in the
first place, and its diligent problem detection process, which
should contain and minimize exposure once problems arise (e.g.
through early recalls). In this respect, the long term management
structure and personal liability of partners give extra comfort that policies
will be rigorously implemented.
After significant capital expenditures and organic growth over the past
three years, Moody's anticipates that the peek of the investment
cycle has now been reached. Going forward management is expected
to use prudence as to the amount of debt raised and the size of capital
expenditure programs initiated. Moody's considers a reduction in
the existing debt levels and improvement in coverage ratios to more conservative
levels as key to strengthen the group's financial flexibility, especially
at a time of cyclical weakening and strong competitive pressures.
The recent partial sale of Michelin's holdings in Peugeot has provided
additional liquidity to support the group's capital structure.
In its rating assignment Moody's relies on management's objective to keep
gearing between 1.0 to 1.3 times (net debt/equity) which
should be achieved through measure growth and consistent retention of
earnings. Although larger acquisitions are currently not anticipated
and have not been factored into the rating, they could be part of
corporate development over the next few years as opportunities arise.
Limitations include anti-trust issues and the company's own return
requirement to avoid dilution of earnings.
In view of Michelin's considerable leverage, Moody's positively
notes the group's conservative liquidity management and financing policies
as all funding requirements are covered by committed facilities (no MAC,
no covenants). Additional liquidity insurance has been arranged
through two new and innovative subordinated loan facilities (at CFM with
MAC at drawing only), which combine insurance and financing aspects
and could cover additional funding needs in a down-cycle as well
as general corporate purposes including acquisitions. In general,
Michelin also puts great importance on risk management to limit its operating
Moody's understands that Michelin has a decentralized financing structure
with debt largely raised at subsidiary level (approximately 75%).
The group's ultimate holding company Compagnie Generale des Etablissements
Michelin (CGEM, France) functions as a pure holding company with
a 95% ownership interest in Compagnie Financiere Michelin (CFM,
Switzerland) and a 40% interest in Manufacture Francaise des Pneumatiques
Michelin (MFPM, France), the group's French operating holding
company. CFM is Michelin's holding company for its international
operations and also retains the remaining 60% interest in MFPM.
All three companies benefit from the unlimited liability of the group's
managing partners. Therefore, Moody's expects that group
support and cash flows would be equally made available for debt service
at each of three top group companies unless liquidity problems of the
entire group would prevent debt servicing in general. The one notch
lower rating for CGEM's indebtedness reflects structural subordination
to debt raised at CFM, MFPM and operating subsidiary companies.
The rating for CFM has not been notched down due to the company's intent
to further increase CFM's importance as a central financing entity,
the diverse cash flow structure provided by worldwide subsidiaries and
the absence of guarantees for subsidiary indebtedness. MFPM's rating,
on the other hand, reflects its operating company nature and the
group support expected as part of the unlimited liability of managing
partners. In general, Moody's notes, that a more centralized
financing structure would improve transparency for the debt investor.
The Michelin Group, headquartered in Clermont-Ferrand,
France, is one of the three leading tire manufacturers in the world
with annual sales of EUR 15.8 billion in 2000. The group
operates globally offering the full range of tire products including passenger,
truck and specialty tires, and publishes maps and guides for travel
Senior Vice President
European Corporates Group
Moody's Deutschland GmbH
+49 69 707 30 700
Vice President - Senior Analyst
European Corporates Group
Moody's Deutschland GmbH
+49 69 707 30 700
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.
Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com
under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.
Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.