18 April 2013 12:43 [Source: ICIS news]
LONDON (ICIS)--Moody’s on Thursday said it raised Bayer’s rating outlook to positive on 12 April because the credit rating agency expects further improvement in the Germany-based company’s earnings over the next 12-18 months.
“Continued reinvestment has strengthened its earnings potential and we think the improvement Bayer has targeted is now very likely,” Moody’s said.
“Bayer has managed to grow and maintain margins in line with higher-rated peers in all key segments, thanks to continued reinvestment of operating cash flows instead of further large-scale M&A [merger and acquisition] or increasing shareholder returns,” it added.
Moody’s said Bayer’s HealthCare division, which has been boosted in the last two or three years by consistent investment and research and development spending, is set to outgrow the group’s other businesses over the next two years and will deliver the bulk of its expected additional earnings.
“The successful launch of several new products in 2011 and 2012 and the strong product pipeline for the near term will deliver further growth in HealthCare earnings and cash flow in 2013 and particularly in 2014. This will add to the debt capacity of the wider group,” Moody’s added.
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