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Rating action

Scope Ratings UK Limited (Scope) has affirmed the issuer rating assigned to Posten Bring AS (Posten, erstwhile Posten Norge AS) at A/Stable. Posten’s senior unsecured debt rating has been affirmed at A.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Business risk profile: BBB+ (unchanged). Posten’s business risk profile continues to be supported by its long-standing monopoly-like position over traditional letter posting services in Norway, which is partially supported by government procurements of commercially non-viable postal services, and its well-established parcels business, of which it is the largest provider in Norway as well as among the top two in the Nordic region.

Scope expects the contribution of the mail business in the overall risk profile of Posten to continue declining over the medium term, and this is expected to be further accelerated following the expected implementation of the proposed Postal Act in Norway (most likely in the second half of FY 2026), which is anticipated to do away with the ‘Universal Service Obligation’ on Posten, and reduce the minimum expected frequency of mail delivery to 1 day per week from 2.5 days per week. This will also significantly impact the government support received by Posten in the form of ‘procurement’ payments, which were required to make good the losses suffered by the company on delivering mail under its regulatory requirements. Scope expects a credit-neutral impact of the change, as any decline in revenues is expected to be matched by equivalent savings, although it might take 12-18 months for the savings to be visible in Posten’s financials, as the postal delivery service winds down. Any changes in the market position of Posten, especially in Norway on account of the newer regulations, will be a key rating monitorable.

Scope anticipates that over the medium term, EBITDA margins* will rise to above 11%, continuing the improvement seen in operating margins over the last two years. This has primarily been made possible by a strong focus as well as a continuous implementation of cost improvement measures (most notably the ‘FRAM’ project) by the group since 2023, and this focus is expected to continue over the medium term; any decline in profitability remains a key rating sensitivity for the group.

Financial risk profile: BBB (unchanged). Posten’s financial risk profile continues to reflect its current position in the capex cycle, with leverage elevated from historical levels on account of its ambitious investment programme in Norway and Sweden. Leverage has improved; debt/EBITDA is expected to be close to 2.5x as of FY 2025, as against a high of 3.5x seen in FY 2022, primarily driven by the improvement in EBITDA. Debt has remained close to NOK 7bn over the last three years. As the group winds down its capex from recent highs (NOK 1.8 bn expected in FY 2025), Scope expects gross debt levels to decrease, as cash generation improves. Scope expects funds from operations/debt to remain above 30%, while interest cover is expected to remain at around 9x.

Posten’s cash flow continues to remain weak; it has reported negative free operating cash flow in 4 out of the last 5 financial years. Although constrained free cash flow is expected at the current point of the capex cycle, Scope expects the FOCF to turn positive from FY 2027 as capex winds down and returns from the large capex completed from FY 2022 – FY 2025 begin to bear results. Any delay in positive cash generation beyond FY 2027 will be a key rating sensitivity.

Liquidity: adequate (unchanged). Posten’s liquidity continues to remain strong as it has good access to banks and domestic bond markets. As of YE 2025, the company is expected to have around NOK 2.3bn in cash and marketable securities as well as NOK 2.4bn in undrawn credit lines, against which there are expected debt repayments of around NOK 2bn over the next 24 months. Liquidity is therefore sufficient to cover interest-bearing short-term debt.

Supplementary rating drivers: +2 notches (unchanged). Posten’s overall issuer rating reflects its standalone credit quality of BBB+ and a two-notch uplift based on Scope’s assessment of the strong capacity and willingness of Posten’s sole owner, the Norwegian state (rated AAA/Stable by Scope) to provide support, assessed following Scope’s Government Related Entities Rating Methodology. Separately, Scope continues to assume that the supportive regulatory framework, under which the Norwegian government covers the net costs of holding the universal service obligation provider licence, will remain in place through 2026, though full compensation costs/losses borne by Posten may not be covered without a time lag. Notwithstanding the removal of ‘USO’ status from Posten following the future enactment of the new Postal Act, Scope expects the ownership and support provided by the Norwegian government to continue over the medium term.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s expectation that Posten’s leverage and EBITDA margins will remain around 2.5x and above 10% respectively, over the medium-term.

The Outlook also assumes that Posten will continue to maintain its position in the Nordic parcel market and that the Norwegian state will remain the company’s majority owner, and that the fall in government procurements over the short to medium term will be balanced by an equal reduction in costs, thus neutralizing financially any significant impact of the proposed legislative changes in the Norwegian Postal Act, which is expected to strip Posten Bring of its USO status over the next 12-18 months.

The upside scenarios for the ratings and Outlook are collectively:

1. Debt/EBITDA well below 3.0x on a sustained basis, and
    
2. Free operating cash flow/debt sustained over 15%

The downside scenarios for the ratings and Outlook are individually:

1. Reduced Norwegian state ownership or control and/or government policy indicating reduced support in the event of distress
    
2. Debt/EBITDA over 3.0x along with consequent sustained negative cash flow ratios
    
3. Secular changes in market share tied to changes in the regulatory landscape

Debt rating

The senior unsecured debt rating is affirmed at A, in line with the issuer rating. Posten is also the bond-issuing entity. Posten has outstanding bonds totaling NOK 4.5bn, maturing between 2026-2031.

Environmental, social and governance (ESG) factors

Overall, ESG factors have no impact on this credit rating action.

All rating actions and rated entities

Posten Bring AS

Issuer rating: A/Stable, affirmation

Senior unsecured debt rating: A, affirmation

*All credit metrics refer to Scope-adjusted figures.

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for these Credit Ratings and Outlook (General Corporate Rating Methodology, 14 February 2025; Government Related Entities Rating Methodology, 3 September 2025), are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions - Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/uk-regulation. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings’ internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and Outlook and the principal grounds on which the Credit Ratings and Outlook are based. Following that review, the Credit Ratings and Outlook were not amended before being issued.

Regulatory disclosures
These Credit Ratings and Outlook are issued by Scope Ratings UK Limited at 52 Grosvenor Gardens, London, United Kingdom, SW1W 0AU, Tel +44 20 7824 5180. The Credit Ratings and Outlook are EU-endorsed.
Lead analyst: Rohit Nair, Director
Person responsible for approval of the Credit Ratings: Thomas Faeh, Executive Director
The Credit Ratings/Outlook were first released by Scope Ratings on 26 March 2021. The Credit Ratings/Outlook were last updated on 14 February 2025.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use / exclusion of liability
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