Research Update: TK Elevator Topco Outlook Revised To Stable On Improved Operating Performance And Leverage; Affirmed At 'B'

Germany-based TK Elevator Topco, the holding company of TK Elevator Group (TK Elevator), continues to transform its operations and strengthen its service offering, demonstrating better profitability and a clear path toward deleveraging and stronger free operating cash flow (FOCF) generation. Despite challenging end markets, we anticipate TK Elevator's operating performance will further improve throughout fiscal 2025 (ending Sept. 30, 2025) , driven by strong demand and record high order intakes in the modernization and service segments, combined with efficiency measures taken. We expect TK Elevator's S&P Global Ratings-adjusted EBITDA margin of 13.4% in the fiscal 2024 and 14.6% in the fiscal 2025. We expect this enhanced operating performance will accelerate the deleveraging, with anticipated leverage (debt to EBITDA excluding payment-in-kind

...- Germany-based TK Elevator Topco, the holding company of TK Elevator Group (TK Elevator), continues to transform its operations and strengthen its service offering, demonstrating better profitability and a clear path toward deleveraging and stronger free operating cash flow (FOCF) generation. - Despite challenging end markets, we anticipate TK Elevator's operating performance will further improve throughout fiscal 2025 (ending Sept. 30, 2025) , driven by strong demand and record high order intakes in the modernization and service segments, combined with efficiency measures taken. - We expect TK Elevator's S&P Global Ratings-adjusted EBITDA margin of 13.4% in the fiscal 2024 and 14.6% in the fiscal 2025. We expect this enhanced operating performance will accelerate the deleveraging, with anticipated leverage (debt to EBITDA excluding payment-in-kind [PIK] notes) of less than 8.0x in fiscal 2024 and about 7.0x in fiscal 2025, down from about 9.1x in fiscal 2023. - Consequently, we have revised...

Research Update