...November 9, 2023 Weaker credit metrics in fiscal year 2022 (ended Dec. 31, 2022) appear to be temporary, with a sequential debt reduction trend in the first half of 2023. Since the start of 2023, Huvepharma EOOD has demonstrated sequential debt reduction that we expect to approach 3.0x by year-end, from the high 4.1x in 2022. Several factors lowered the 2022 performance, notably high inflation, and animal disease outbreaks (especially the avian influenza over 2021- 2022). These factors were partly offset by price increases, a good product portfolio, and a strong sales force. S&P Global Ratings-adjusted EBITDA margins are trending higher (toward 20%) due to reducing inflation and sustained price increases. This is despite slower revenue growth of 3%-4% in 2023 from weaker demand for general antibiotics products, notably in Europe. Reducing inflation and price increases combined with lower capital expenditure (capex) of 55 million-60 million (92 million in 2022), and therefore higher cash...
