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MarketScreener Homepage  >  Equities  >  Swiss Exchange  >  Nestlé    NESN   CH0038863350


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Nestle : A.M. Best Downgrades Issuer Credit Rating of Intercona Re AG

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10/08/2018 | 10:18am EDT

A.M. Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to 'aa-' from 'aa' and affirmed the Financial Strength Rating (FSR) of A+ (Superior) of Intercona Re AG (Intercona) (Switzerland).

The outlook of these Credit Ratings (rating) is stable.

The ratings reflect Intercona's balance sheet strength, which A.M. Best categorises as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The downgrade reflects the weakened financial strength of the company's ultimate parent, Nestle S.A. (Nestle), following changes in the group's capital structure. Intercona's ratings reflect its importance to Nestle, a leading global food and beverage company, and its high level of integration within the group's risk management function.

Intercona's balance sheet strength is underpinned by the strongest level of risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio. The balance sheet strength assessment benefits from a positive assessment of the holding company, reflecting Nestle's stronger credit profile. Intercona's adequate liquidity and capital buffers built up through the retention of earnings within its equalisation and fluctuation reserves further support its balance sheet strength.

The company's strong operating performance and ability to withstand volatility from large loss events is evidenced through a five-year average (2013-2017) combined ratio of 90.0%. Intercona's disciplined underwriting enabled the company to report pre-tax profits of CHF 77.1 million (excluding movement of equalisation and fluctuation reserves) in 2017, following a financial year loss of CHF 49.2 million in 2016, primarily driven by a natural catastrophe loss.

Intercona's business profile assessment reflects its role as the captive reinsurer of Nestle. Intercona provides the first layer of reinsurance protection on the group's global insurance programme, providing a diverse underwriting portfolio by geography and product. Intercona is a key part of its parent's overall risk management framework, assisting with the mitigation of risk exposures and loss prevention.

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best's Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to Credit Ratings that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.

(C) 2018 Electronic News Publishing, source ENP Newswire

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Financials (CHF)
Sales 2019 95 245 M
EBIT 2019 16 347 M
Net income 2019 11 325 M
Debt 2019 33 201 M
Yield 2019 2,60%
P/E ratio 2019 25,82
P/E ratio 2020 23,08
EV / Sales 2019 3,50x
EV / Sales 2020 3,36x
Capitalization 301 B
Duration : Period :
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Technical analysis trends NESTLÉ
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Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 28
Average target price 102  CHF
Spread / Average Target 0,50%
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Ulf Mark Schneider Chief Executive Officer & Director
jeff hamilton President
Paul Bulcke Chairman
Magdi Batato Executive Vice President-Operations
François-Xavier Michel Marie Roger Chief Financial Officer & Executive Vice President
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1st jan.Capitalization (M$)
NESTLÉ26.57%307 670
DANONE22.39%58 816
GENERAL MILLS37.83%32 155