Pfleiderer Group B.V.&Co. KG

Overview Key strengths Key risks Leading market positions in Germany and Poland. Commoditized nature of products and cyclical end markets. Expanding share of high-margin value-added products. Exposed to raw material price inflation. High leverage and financial-sponsor ownership. Consumer confidence is likely to undermine Pfleiderer Group B.V.&Co. KG (Pfleiderer)'s volumes and S&P Global Ratings-adjusted EBITDA margins. Pfleiderer?s end markets are cyclical since they relate to the construction and building renovation industry. We believe that demand for its products is likely to weaken with consumer confidence in second-half 2022. Consumer confidence is particularly fragile in Germany (see " Credit Conditions Europe Q3 2022: Pain On The Horizon ," published June 28, 2022, on RatingsDirect) in light of recessionary fears. In

...Consumer confidence is likely to undermine Pfleiderer Group B.V. & Co. KG (Pfleiderer)'s volumes and S&P Global Ratings-adjusted EBITDA margins. Pfleiderer's end markets are cyclical since they relate to the construction and building renovation industry. We believe that demand for its products is likely to weaken with consumer confidence in second-half 2022. Consumer confidence is particularly fragile in Germany (see "Credit Conditions Europe Q3 2022: Pain On The Horizon," published June 28, 2022, on RatingsDirect) in light of recessionary fears. In first-half 2022, Pfleiderer passed raw material (mainly wood and chemicals) price increases on to customers, albeit with a time lag. We thereby expect weaker EBITDA margins for 2022 (versus 2021). Given the weaker economic conditions, we believe that further price increases will be more difficult to pass through from second-half 2022. Pfleiderer is self-sufficient in terms...

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