Fitch Ratings Affirms SC Johnson's Senior Notes at 'BBB+', Outlook Stable.Business Editors NEW YORK--(BUSINESS WIRE)--Nov. 21, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed its ratings on S.C. Johnson & Son, Inc.'s (SC Johnson) $1.4 billion senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. at 'BBB+' and $450 million commercial paper program at 'F2'. The Rating Outlook is Stable. The ratings reflect SC Johnson's strong brands with leading market positions across several broad categories that provide the company with stable operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. and cash flow generation. The ratings also consider the company's competitive market environment as well as its status as a private company, which limits its access to equity capital. In addition, further debt financed acquisition or other activity, could slow the pace of the company's de-leveraging. During 2003, SC Johnson's revenues increased due to the acquisition of the household insecticide insecticide Any of a large group of substances used to kill insects. Such substances are mainly used to control pests that infest cultivated plants and crops or to eliminate disease-carrying insects in specific areas. business of Bayer AG Bayer AG German chemical and pharmaceutical company. Founded in 1863 by Friedrich Bayer (1825–1880), it now operates plants in more than 30 countries. Bayer has originated scores of pharmaceuticals, chemicals, and synthetic materials; it was the first developer and , as well as base business growth in part due to new product introductions and growth in international markets. Operating profit margin Operating profit margin The ratio of operating profit to net sales. was relatively flat, as higher marketing and benefit costs were offset by savings from system enhancements and other cost cutting efforts, and cash flow generation remained solid. Nonetheless, the acquisition from Bayer AG resulted in an increase in debt to $1.7 billion on June 30, 2003 from $1.1 billion in the prior year and as a result, leverage and coverage measures weakened. Fitch expects SC Johnson's revenues and operating profits will benefit from a full year of results from its acquired businesses as well as further cost cutting initiatives including additional system enhancements and supply chain and manufacturing improvements. In addition, debt is anticipated to decline as excess free cash flow is used to reduce outstanding balances. As a result, credit protection measures will strengthen from current levels. SC Johnson's key product categories include home cleaning, air care, insect control and home storage. It has several leading brands within those segments such as Glade, Pledge, Shout, Windex, Ziploc, OFF!, Raid, Edge and Skintimate, which each hold the number one market position in the U.S. Products are sold in over 100 countries worldwide; however, North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. accounts for the largest component of the company's revenues. |
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