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TEXT-S&P: Estee Lauder has slight lead on Shiseido
July 25, 2012 / 2:29 PM / 5 years ago

TEXT-S&P: Estee Lauder has slight lead on Shiseido

 (The following statement was released by the rating agency)
 July 25 - U.S.-based The Estee Lauder Cos. Inc. and Japan-based
Shiseido Co. Ltd. are two of the leading multinational cosmetics
companies within the consumer products sector. Both enjoy strong brand
recognition, good cash flow, strong liquidity, and good geographic diversity.
They also benefit from the favorable credit characteristics of the cosmetics
industry, including steady demand, low capital intensity, and stable cash flow
generation. At the same time, both face challenges abroad: economic weakness in
Europe could reduce profitability, and competition in the high-growth emerging
markets is intense. 

According to a Standard & Poor's Ratings Services report published today, 
Estee Lauder has a slight edge. 

"Its margins are higher, its credit metrics are steadier, and its cash flow is 
stronger," said Standard & Poor's Jacqueline Hui, one of the primary credit 
analysts on the report, titled "Estee Lauder Has An Edge On Shiseido In The 
Battle Of The Global Cosmetics Giants."

Standard & Poor's has 'A' long-term and 'A-1' short-term credit ratings, with 
stable outlooks, on both companies. "However," said Ms. Hui, "we could 
consider lowering our ratings on Shiseido if its adjusted leverage does not 
decrease towards 2x by fiscal 2012 and to below 2x by fiscal 2013."


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Primary Credit Analysts: Jacqueline Hui, New York (1) 212-438-1960;
                      jacqueline_hui@standardandpoors.com
                      Machiko Amano, Tokyo (81) 3-4550-8659;
                      machiko_amano@standardandpoors.com
Media Contact: Mimi Barker, New York (1) 212-438-5054;
            mimi_barker@standardandpoors.com


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