Research Update: Pasubio Outlook Revised To Negative On Slower Deleveraging From Weaker Auto Production; 'B' Rating Affirmed - S&P Global Ratings’ Credit Research

Research Update: Pasubio Outlook Revised To Negative On Slower Deleveraging From Weaker Auto Production; 'B' Rating Affirmed

Research Update: Pasubio Outlook Revised To Negative On Slower Deleveraging From Weaker Auto Production; 'B' Rating Affirmed - S&P Global Ratings’ Credit Research
Research Update: Pasubio Outlook Revised To Negative On Slower Deleveraging From Weaker Auto Production; 'B' Rating Affirmed
Published Dec 20, 2024
9 pages (3868 words) — Published Dec 20, 2024
Price US$ 225.00  |  Buy this Report Now

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Abstract:

Italian premium and luxury auto supplier Leather SpA (doing business as Pasubio) is facing weaker-than-expected volumes, which will strain the company's earnings and credit metrics in 2024 and 2025. Lower revenue in 2024 and limited earnings growth in 2025 will lead to S&P Global Ratings-adjusted leverage of about 6.4x in 2024-2025, compared with 6.6x in 2023 and which is above our expectations for the rating. Prolonged weakness of European auto production could restrict Pasubio's earnings expansion beyond 2025 such that the group will not reduce its leverage. However, we expect better free cash flow, with free operating cash flow (FOCF) to debt of 3%-4% in 2025 due to lower capital expenditure (capex), up from about 0% to 1% in 2024.

  
Brief Excerpt:

...- Italian premium and luxury auto supplier Leather SpA (doing business as Pasubio) is facing weaker-than-expected volumes, which will strain the company's earnings and credit metrics in 2024 and 2025. - Lower revenue in 2024 and limited earnings growth in 2025 will lead to S&P Global Ratings-adjusted leverage of about 6.4x in 2024-2025, compared with 6.6x in 2023 and which is above our expectations for the rating. - Prolonged weakness of European auto production could restrict Pasubio's earnings expansion beyond 2025 such that the group will not reduce its leverage. However, we expect better free cash flow, with free operating cash flow (FOCF) to debt of 3%-4% in 2025 due to lower capital expenditure (capex), up from about 0% to 1% in 2024. - We therefore revised our outlook on Pasubio to negative from stable and affirmed our 'B' long-term issuer credit rating as well as 'B' issue-level rating on the company and its secured debt. - The negative outlook reflects the risk that Pasubio might...

  
Report Type:

Research Update

Issuer
Leather SpA
Sector
Global Issuers
Country
Italy
Region
Europe, Middle East, Africa
Format:
PDF Adobe Acrobat
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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Research Update: Pasubio Outlook Revised To Negative On Slower Deleveraging From Weaker Auto Production; 'B' Rating Affirmed" Dec 20, 2024. Alacra Store. Nov 07, 2026. <http://www.alacrastore.com/s-and-p-credit-research/Research-Update-Pasubio-Outlook-Revised-To-Negative-On-Slower-Deleveraging-From-Weaker-Auto-Production-B-Rating-Affirmed-3302681>
  
APA:
S&P Global Ratings’ Credit Research. (). Research Update: Pasubio Outlook Revised To Negative On Slower Deleveraging From Weaker Auto Production; 'B' Rating Affirmed Dec 20, 2024. New York, NY: Alacra Store. Retrieved Nov 07, 2026 from <http://www.alacrastore.com/s-and-p-credit-research/Research-Update-Pasubio-Outlook-Revised-To-Negative-On-Slower-Deleveraging-From-Weaker-Auto-Production-B-Rating-Affirmed-3302681>
  
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