Research Update: Industrial Service Provider Bilfinger Upgraded To 'BB+' On Improved Business And Financial Flexibility; Outlook Stable

European industrial service provider Bilfinger SE's operating margins exceeded our expectations in 2021 and we now forecast S&P Global Ratings-adjusted EBITDA margin will rise gradually toward 6% in 2023 from 5.0% last year. This is supported by the company's completed transformation and restructuring projects, the ability to pass-on most cost inflation for its service contracts, and very limited business activities in Russia and Ukraine. Furthermore, we expect the group to maintain a strong balance sheet with adjusted funds from operations (FFO) to debt above 40% in 2022-2023, since only about €250 million of the €458 million Apleona sales proceeds are earmarked for shareholder distributions. We therefore raised our long-term issuer credit and issue ratings on Bilfinger and its debt to

...- European industrial service provider Bilfinger SE's operating margins exceeded our expectations in 2021 and we now forecast S&P Global Ratings-adjusted EBITDA margin will rise gradually toward 6% in 2023 from 5.0% last year. - This is supported by the company's completed transformation and restructuring projects, the ability to pass-on most cost inflation for its service contracts, and very limited business activities in Russia and Ukraine. - Furthermore, we expect the group to maintain a strong balance sheet with adjusted funds from operations (FFO) to debt above 40% in 2022-2023, since only about 250 million of the 458 million Apleona sales proceeds are earmarked for shareholder distributions. - We therefore raised our long-term issuer credit and issue ratings on Bilfinger and its debt to '##+' from '##', with the recovery rating unchanged at '3' (rounded estimate of 65% recovery). - The stable outlook reflects our expectation of a continued strong balance sheet and positive operating...

Research Update