S&P shifts Kongsberg view to positive

S&P said it revised Kongsberg Automotive ASA’s outlook to positive from negative and affirmed the B- rating on Kongsberg and the B rating on the €275 million senior secured notes issued by Kongsberg Actuation Systems BV due in 2025.

Citing rising demand for autos and trucks, the agency said it now sees Kongsberg generating a 13%-15% increase in revenue in 2021, driving an increase in the EBITDA margin to 2019 levels of 9%-10% and to a reduction in debt to EBITDA to well under 5x.

“The positive outlook indicates that we could raise the ratings in the next six-to-12 months if Kongsberg's EBITDA margin recovers to more than 9%, combined with successful management of capital expenditure (capex) and working capital, leading to a reduction in debt to EBITDA to below 5x and free operating cash flow (FOCF) to debt trending toward 5%,” S&P said in a press release.

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