Research Update: German Live-Commerce Retailer HSE Finance S.a.r.l Downgraded To 'B-' On Weaker Profit And Credit Metrics; Outlook Stable - S&P Global Ratings’ Credit Research

Research Update: German Live-Commerce Retailer HSE Finance S.a.r.l Downgraded To 'B-' On Weaker Profit And Credit Metrics; Outlook Stable

Research Update: German Live-Commerce Retailer HSE Finance S.a.r.l Downgraded To 'B-' On Weaker Profit And Credit Metrics; Outlook Stable - S&P Global Ratings’ Credit Research
Research Update: German Live-Commerce Retailer HSE Finance S.a.r.l Downgraded To 'B-' On Weaker Profit And Credit Metrics; Outlook Stable
Published May 12, 2023
9 pages (4065 words) — Published May 12, 2023
Price US$ 225.00  |  Buy this Report Now

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Abstract:

Notwithstanding the anticipated overall margin improvement in 2023 versus 2022, we forecast HSE Finance's credit metrics will remain weaker for longer than we had previously expected, with S&P Global Ratings-adjusted leverage above 6.0x in 2023 after a peak of 9.4x in 2022, higher than our September 2022 anticipation of 6.6x. Adding to this, cash flows generated in Russia should contribute only marginally to the group's debt-servicing, in a context where German, Austrian, and Swiss (DACH) operations are still expected to face a difficult market environment in 2023. Consequently, we lowered our long-term ratings on HSE and its senior secured notes to 'B-' from 'B'. The stable outlook reflects our view that HSE's leverage will recover to about 6.0x-6.5x in 2023

  
Brief Excerpt:

...- Notwithstanding the anticipated overall margin improvement in 2023 versus 2022, we forecast HSE Finance's credit metrics will remain weaker for longer than we had previously expected, with S&P Global Ratings-adjusted leverage above 6.0x in 2023 after a peak of 9.4x in 2022, higher than our September 2022 anticipation of 6.6x. - Adding to this, cash flows generated in Russia should contribute only marginally to the group's debt-servicing, in a context where German, Austrian, and Swiss (DACH) operations are still expected to face a difficult market environment in 2023. - Consequently, we lowered our long-term ratings on HSE and its senior secured notes to 'B-' from 'B'. - The stable outlook reflects our view that HSE's leverage will recover to about 6.0x-6.5x in 2023 and 5.5x-6.0x in 2024 including Russia, and 7.0x-7.5x in 2023 and 6.5x-7.0x in 2024 without Russia, supported by a recovery in EBITDA margin to 14.0%-16.0% in 2023-2024 from the 9.8% reported in 2022, while free operating cash...

  
Report Type:

Research Update

Issuer
HSE Finance S.a.r.l.
Sector
Global Issuers
Country
Luxembourg
Region
Europe, Middle East, Africa
Format:
PDF Adobe Acrobat
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S&P Global Ratings’ Credit Research—S&P Global Ratings’ credit research provides analysis on issuers and debt obligations of corporations, states and municipalities, financial institutions, insurance companies and sovereign governments. S&P Global Ratings also offers insight into the credit risk of structured finance deals, providing an independent view of credit risk associated with a growing array of debt-securitized instruments.

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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Research Update: German Live-Commerce Retailer HSE Finance S.a.r.l Downgraded To 'B-' On Weaker Profit And Credit Metrics; Outlook Stable" May 12, 2023. Alacra Store. May 09, 2025. <http://www.alacrastore.com/s-and-p-credit-research/Research-Update-German-Live-Commerce-Retailer-HSE-Finance-S-a-r-l-Downgraded-To-B-On-Weaker-Profit-And-Credit-Metrics-Outlook-Stable-2985883>
  
APA:
S&P Global Ratings’ Credit Research. (). Research Update: German Live-Commerce Retailer HSE Finance S.a.r.l Downgraded To 'B-' On Weaker Profit And Credit Metrics; Outlook Stable May 12, 2023. New York, NY: Alacra Store. Retrieved May 09, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/Research-Update-German-Live-Commerce-Retailer-HSE-Finance-S-a-r-l-Downgraded-To-B-On-Weaker-Profit-And-Credit-Metrics-Outlook-Stable-2985883>
  
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