Tear Sheet: Leather SpA

We expect Pasubio?s revenue to decline about 5% in 2024 due to its exposure to premium and luxury European automakers (including Porsche and Jaguar Land Rover), whose production volumes have been hampered by aluminum supply disruptions and weaker global passenger car sales. For 2025, we forecast flat revenue compared with 2024, in line with the S&P Global Mobility forecast for European premium and luxury light vehicle production. Nevertheless, we anticipate improved profitability this year and next thanks to additional production automation, reduced scrap rates, and lower raw hide prices in comparison to 2023. We project an S&P Global Ratings-adjusted EBITDA margin of 18.0%-18.5% in 2024-2025, up from 15.4% in 2023. However, we expect Pasubio?s EBITDA expansion will remain restricted by

...October 25, 2024 We expect Leather S.p.A. (Pasubio) to maintain some rating headroom thanks to improved profitability through 2025, despite lower revenue. We expect Pasubio's revenue to decline about 5% in 2024 due to its exposure to premium and luxury European automakers (including Porsche and Jaguar Land Rover), whose production volumes have been hampered by aluminum supply disruptions and weaker global passenger car sales. For 2025, we forecast flat revenue compared with 2024, in line with the S&P Global Mobility forecast for European premium and luxury light vehicle production. Nevertheless, we anticipate improved profitability this year and next thanks to additional production automation, reduced scrap rates, and lower raw hide prices in comparison to 2023. We project an S&P Global Ratings-adjusted EBITDA margin of 18.0%-18.5% in 2024-2025, up from 15.4% in 2023. However, we expect Pasubio's EBITDA expansion will remain restricted by the muted volume growth, limiting rating leeway....

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