New York, October 26, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.
The review was conducted through a portfolio review discussion held on 19 October 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.
Key Rating Considerations
The principal methodology used for the rated entities listed below was Alcoholic Beverages published in December 2021. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Alcoholic Beverages
Scale: Scale can indicate the overall depth of a company's business and its resilience to shocks, such as sudden shifts in demand or rapid cost increases. Scale also influences an alcoholic beverage company's market strength and the availability of capital. In addition, scale can indicate an alcoholic beverage company's capacity to sustain earnings and generate cash flow. Revenue can be used as an indicator of scale.
Business Profile: The business profile of an alcoholic beverage company is an indicator of its ability to generate sustainable earnings and operating cash flows. Core aspects of an alcoholic beverage company's business profile are its geographic diversification and exposure to riskier markets for alcoholic beverages, the strength and diversification of its product portfolio, its overall industry position, as well as the strength and depth of its product innovation, distribution networks and infrastructure, all of which can effect market, political and regulatory risks.
Profitability: Profitability is an indicator of an alcoholic beverage company's strength and durability, and it can reflect the competitiveness of its product portfolio. It provides indications of the ability to withstand economic downturns and service debt and other obligations. Market position, pricing flexibility or cost efficiencies can influence profitability. EBITA Margin can be used as an indicator of profitability.
Leverage and Coverage: Leverage and cash flow coverage measures provide indications of an alcoholic beverage company's financial flexibility and long-term viability. Leverage and coverage can be an indicator of a company's investment capabilities, and its ability to withstand fluctuations in the business cycle and respond to unexpected challenges. Leverage and coverage can be measured by ratios such as: Retained Cash Flow / Net Debt, Debt / EBITDA, and EBIT / Interest.
Financial Policy: Financial policy encompasses management and board tolerance for financial risk and commitment to a strong credit profile. It is considered because it can affect debt levels, credit quality, the future direction for the company and the risk of adverse changes in financing and capital structure. Financial risk tolerance serves as a guidepost for investment and capital allocation.
Other Considerations: Some other considerations may include: financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends may also be considered.
• Anheuser-Busch InBev SA/NV
• Bacardi Limited
• Blue Ribbon, LLC
• Brown-Forman Corporation
• City Brewing Company, LLC
• Constellation Brands, Inc.
• Molson Coors Beverage Company
The principal methodology used for the rated entities listed below was Soft Beverages published in September 2022. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Soft Beverages
Scale: Scale is considered because it is an important indicator of the overall depth of a company's business and its success in attracting a variety of customers, as well as its resistance to shocks, such as sudden shifts in demand or rapid cost increases. Larger companies have more resources and tend to be more broadly diversified, which can reduce volatility and credit risk. Larger scale allows companies to leverage costs, including those associated with manufacturing, sales force and marketing, distribution, and R&D, and gives them more clout with purchasing organizations, customers, and suppliers. Scale can provide insight into a number of credit considerations including position with customers, global market presence and franchise strength. Scale provides more resources and could also reduce exposure to operational and regulatory risks including problems associated with one manufacturing facility. Revenue is a measure of scale.
Business Profile: The business profile of a soft beverage company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. Core aspects of a soft beverage company's business profile are its product and geographic diversity, brand strength as well as global and local market positions, and company-specific and sector-wide variables that can influence prospects for sales growth and market share shifts, including a company's execution capabilities and price elasticity of its products. This factor provides an indication of the likely stability and sustainability of the company's cash flows.
Profitability: The profitability is considered because profits are needed to generate sustainable cash flow and maintain a competitive advantage. The EBITA margin is an indicator of profitability.
Leverage and Coverage: Leverage and coverage measures are indicators of a company's financial flexibility and long-term viability. Financial flexibility is critical to respond to changing consumer preferences, regulatory changes, competitive challenges, and unexpected challenges or costs. Soft beverage companies need resources to invest in innovation, product development, marketing, distribution efficiencies and customer service technologies as well as to make strategic acquisitions that diversify product lines or expand into new geographic regions. Measures of leverage and coverage include Debt/ EBITDA, Retained Cash Flow/ Net Debt and EBIT/ Interest Expense.
Financial Policy: Our assessment of management and board tolerance for financial risk is a key rating determinant because it directly affects future debt levels, credit quality, and the risk of adverse changes in financing and capital structures. Considerations include a company's public commitments in this area, its track record for adhering to commitments, and our views on the company's ability to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.
Other Rating Considerations: Other considerations may include but are not limited to our assessment of the quality of management, corporate governance, financial controls, liquidity management and event risk.
• Coca-Cola Company (The)
• Coca-Cola Consolidated, Inc.
• Keurig Dr Pepper Inc.
• Naked Juice LLC
• PepsiCo, Inc.
• Triton Water Holdings, Inc.
The principal methodology used for the rated entity listed below was Business and Consumer Services published in November 2021. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Business and Consumer Services
Scale: Scale is considered because larger scale can be an indicator of a company's ability to influence business trends and pricing within its service segments and to support a stable or growing market position. Scale also can be an indicator of greater resilience to changes in demand, geographic diversity, cost absorption, R&D capabilities and of greater bargaining strength with customers, labor, and vendors. Revenue is an indicator of scale.
Business Profile: The business profile of a company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. The business and consumer service industry comprises a vast array of business models encompassing a multitude of identifiable customer bases worldwide. We consider the underlying demand characteristics of a company's service offerings and their relative breadth, strength, and endurance of demand. Companies that have established a long history of strong demand for a diverse range of service offerings that are critical to customer needs generally entail lower risk compared to those that offer a single line of service which have less importance for customer needs or have a limited history of success.
Profitability: Profits matter because they are necessary to maintain a business's competitive position, including sufficient reinvestment in marketing, research, facilities, and human capital. Sustained high profitability is generally a strong indicator of substantial competitive advantages, particularly if combined with evidence of a stable or rising market share. EBITA Margin is an indicator of profitability.
Leverage and Coverage: Leverage and coverage measures are indicators of a company's financial flexibility and long-term viability, including its ability to adapt to changes in the economic and business environment within the segments in which it operates. Indicators of leverage and coverage include ratios such as: Debt / EBITDA, EBITA / Interest Expense, and Retained Cash Flow/ Net Debt.
Financial Policy: Management and board tolerance for financial risk is a consideration because it directly affects debt levels, credit quality, and the risk of adverse changes in financing and capital structure. Our assessment of financial policies includes the perceived tolerance of a company's governing board and management for financial risk and the future direction for the company's capital structure. Considerations include a company's public commitments in this area, its track record for adhering to commitments, and our views on the ability for the company to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.
Other Rating Considerations: Other considerations may include but are not limited to financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings.
• Primo Water Corporation
This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.
Please see the Issuer page on https://ratings.moodys.com for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.
This publication does not announce a credit rating action.
For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com
for the most updated credit rating action information and rating history.
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
