The change in Outlook reflects Ceconomy’s improved leverage driven by the successful implementation of cost-saving measures and resilient operating performance despite challenging market conditions.

Following the recent affirmation of the BBB- issuer rating and the change in Outlook to Negative from Stable, Scope has updated its analytical report on Ceconomy AG.

The change in Outlook reflects high risk of elevated leverage driven by deterioration of operational performance despite cost cutting efforts and optimization of the group structure.

The expected deterioration in profitability amid inflationary pressure should be mitigated by the group’s robust balance sheet.

The rating action reflects the group’s comparatively solid performance in the last 18 months and an expected improvement in free operating cash flow generation in the second half of fiscal 2021.

The confirmation reflects the company's comparatively solid performance in the first nine months of its fiscal year in 2020 and the much faster-than-expected recovery from the Covid-19 shutdowns.

The rating action reflects significant uncertainty in the wake of the current Covid-19 pandemic, which is likely to considerably reduce consumer electronics retail activity in 2020.

The group’s rating-positive underlying market and its clear leadership therein, as well as the strong credit metrics and new management’s supportive financial policy continue to support the ratings.

Significant profit warning after weak fourth quarter trading conditions; expected future credit metrics supported by divestiture of 9% stake in Metro AG.

The rating reflects our view of Ceconomy's supportive underlying industry risk complemented by its position as the European market leader in consumer electronics retailing. It also reflects our view on management's conservative financial policy.