Research Update: Industrial Service Provider Bilfinger SE Outlook Revised To Positive On Improving Profitability; 'BB+' Rating Affirmed

European industrial service provider Bilfinger SE significantly enhanced its operating margins in 2023. We now forecast in our base case that its S&P Global Ratings-adjusted EBITDA margin will climb to about 7% in 2024 and above 7.5% in 2025, from 6.1% in 2023 and 3.7% in 2022. This is supported by the company's completed restructuring initiatives, including simplifying its group structure and workforce reduction, as well as transformation measures such as bundling of services and repositioning its U.S. business. Furthermore, the group announced it is committed to maintaining more conservative leverage ratios. It now targets an S&P Global Ratings-adjusted funds from operations (FFO) to debt ratio above 50% compared with more than 30% before. We revised our outlook to positive

...- European industrial service provider Bilfinger SE significantly enhanced its operating margins in 2023. We now forecast in our base case that its S&P Global Ratings-adjusted EBITDA margin will climb to about 7% in 2024 and above 7.5% in 2025, from 6.1% in 2023 and 3.7% in 2022. - This is supported by the company's completed restructuring initiatives, including simplifying its group structure and workforce reduction, as well as transformation measures such as bundling of services and repositioning its U.S. business. - Furthermore, the group announced it is committed to maintaining more conservative leverage ratios. It now targets an S&P Global Ratings-adjusted funds from operations (FFO) to debt ratio above 50% compared with more than 30% before. - We revised our outlook to positive from stable and affirmed our '##+' long-term issuer credit rating on Bilfinger. - The positive outlook indicates that we could raise the rating in the next 12-24 months if Bilfinger sustains adjusted EBITDA...

Research Update