Speedster Bidco GmbH

Overview Key strengths Key risks Strong market position as an operator of online car classifieds platforms and well-recognized brand in core markets, translating into above-average profitability exceeding 30%. Highly leveraged capital structure with S&P Global Ratings-adjusted leverage above 10x in 2023 and aggressive financial policy stemming from private equity ownership. Asset-light business model with modest capital expenditure (capex) needs of about €10 million supporting positive free operating cash flow (FOCF) generation. Decline of funds from operations (FFO) interest coverage to below 2.0x following higher expected interest payments due to increase in floating interest rates. No major near-term debt maturities until March 2027. Relatively small size of operations with expected revenue of less than €360 million in 2023 and limited business

...Speedster Bidco GmbH's (AS24's) rating headroom remains limited due to high leverage and thin interest cover ratio. We forecast S&P Global Ratings-adjusted leverage in 2023 will decline to 10.1-10.6x after 12.5x in 2022, mainly due to EBITDA growth. We also expect that FFO cash interest coverage ratio will weaken in 2023 to 1.3x-1.6x from 2.2x in 2022 due to higher interest payments driven by increased base interest rates. The high leverage is driven by weaker operations and profitability growth in 2021-2022 than we initially expected when we assigned the rating in 2020. The weaker growth was due to lower volume of listings following the car production shortages that began in 2020 during the COVID pandemic and persisted until recently. AS24's aggressive financial policy, which is driven by its private equity owners, is also a driving factor for high leverage. The group's cash paying debt increased by 93 million to 1.22 billion in 2022 versus April 2020 (the time of the leveraged buyout),...

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