S&P nips Knorr-Bremse

S&P said it lowered its rating on Knorr-Bremse AG to A- from A.

“KB faces challenges that will not allow it to return to an EBITDA margin of more than 17% until at least 2025. The group's operating performance continuous to be affected by industrywide challenges, including inflationary pressures and the time lag to fully pass higher costs to clients, unstable supply chains, increased competition in the commercial vehicle systems segment, and softer overall market growth. Management has addressed the challenges, but it will take some time for the countermeasures to take effect, and a recovery will be gradual, in our view,” S&P said in a press release.

The agency said it forecasts KB’s “S&P Global Ratings-adjusted EBITDA margins to recover by 1-3 percentage points from a low of 13% in 2022 to 14%-16% in 2024 and 2025, which is well below historically high levels of 17%-21% from 2014-2020.”

The outlook is stable.

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