Research Update: Pfleiderer Outlook Revised To Negative From Stable On Forecast Higher Leverage; 'B' Rating Affirmed

We expect wood panel producer Pfleiderer Group B.V.&Co. KG's EBITDA, as adjusted by S&P Global Ratings, to decline substantially in 2023 due to lower demand for construction and home renovation products, driving S&P Global Ratings-adjusted leverage to about 8.1x from 5.4x in 2022. Although Pfleiderer's adjusted leverage is likely to reduce to 7.0x-7.2x in 2024, on the back of a forecast improvement in EBITDA, any deterioration in the company's financial performance could constrain the rating. As a result, we revised our outlook on Pfleiderer to negative from stable, and we affirmed our 'B' ratings on Pfleiderer and the company's €750 million senior secured notes, due 2026. The negative outlook reflects a one-in-three possibility of a downgrade in the

...- We expect wood panel producer Pfleiderer Group B.V. & Co. KG's EBITDA, as adjusted by S&P Global Ratings, to decline substantially in 2023 due to lower demand for construction and home renovation products, driving S&P Global Ratings-adjusted leverage to about 8.1x from 5.4x in 2022. - Although Pfleiderer's adjusted leverage is likely to reduce to 7.0x-7.2x in 2024, on the back of a forecast improvement in EBITDA, any deterioration in the company's financial performance could constrain the rating. - As a result, we revised our outlook on Pfleiderer to negative from stable, and we affirmed our 'B' ratings on Pfleiderer and the company's 750 million senior secured notes, due 2026. - The negative outlook reflects a one-in-three possibility of a downgrade in the next 12 months if Pfleiderer's leverage remains well above 7x, as adjusted by S&P Global Ratings, potentially because Pfleiderer could not recover volumes or failed to take sufficient offsetting measures....

Research Update