S&P lowers Dedalus

S&P said it lowered its long-term issuer and issue ratings on Dedalus to B- from B. The recovery rating remains at 3.

The outlook is stable.

Dedalus reported an 8.8% EBITDA decline in first-half 2022 on weaker revenue growth than anticipated, increasing research and development, sales, and marketing investments, and operational disruptions caused by an internal enterprise resource planning rollout, S&P said.

“The company’s S&P Global Ratings-adjusted EBTIDA was weaker than we expected and debt increased after a series of debt-funded acquisitions in 2020-2021. We forecast this will lead to S&P Global Ratings-adjusted debt to EBITDA remaining above 10x in 2022-2023, with free operating cash flow (FOCF) outflow of up to €50 million in 2022 before it turns positive in 2023,” S&P said in a news release.

S&P said it previously expected the company would deleverage to 6.5x-7.5x in 2022.

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