S&P drops Dometic outlook to stable

S&P said it revised its outlook for Dometic Group AB to stable from positive and affirmed its BB- ratings.

“Relatively unsupportive market trends in 2023 will challenge Dometic's deleveraging trajectory. For 2023, we foresee a relatively shallow demand environment for Dometic's products. In particular, demand will remain weak for the RV OEM division, affecting the group's top line. We anticipate that revenue could contract by 3%-7% in 2023 to Swedish krona (SEK)27.8 billion-SEK 28.8 billion from SEK 29.8 billion in 2022,” S&P said in a press release.

On the plus side, the agency noted Dometic will continue being profitable with an estimated EBITDA margin of about 15%, marginally better than its 14.6% preliminary estimate for 2022.

“We forecast FFO to debt will remain comfortably in line with our requirement for the rating. Under our revised base case, we anticipate that S&P Global Ratings-adjusted FFO to debt will be 18%-22% in 2023 and 20%-25% in 2024. We see this leverage as commensurate with the current rating category,” the agency said.

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