Standard Profil - comment

An improving Gross Profit margin driven by further efficiencies has led to higher EBITDA.  This was also aided by slightly higher volumes making the results a continuation of the improving operations at Standard Profil.  Operationally, the outlook is rosy, with Standard Profil likely to outgrow the market due to numerous new product launches. 

However, the pace of improvement is slow, which leaves the credit story in the same position: leverage at 3.5x coupled with limited cash deleveraging due to poor cash conversion.  Refinancing of their May 2026 bonds is on the agenda, but a refinancing rates of c.10% would further reduce the opportunity for cash deleveraging.  There is the potential for further equity injection and with limited debt ahead of the bonds, bondholders are in a strong position. 

The conference call is next Wednesday at 2 pm.