S&P upgrades Europcar Mobility

S&P said it raised its ratings on Europcar Mobility Group and Europcar International SASU to B+ from B, as well as EC Finance plc’s €500 million fleet bond to BB- from B+.

“We estimate that Europcar's 2022 earnings and cash flows will reach new highs. We anticipate that Europcar's corporate EBITDA post-International Financial Reporting Standard (IFRS) 16 will increase to about €530 million, higher than the pre-pandemic level of about €390 million for 2019. We also forecast corporate free cash flow after interest will increase to about €350 million. This is mainly thanks to a strong recovery in demand for leisure activities and very favorable pricing for car rental companies like Europcar, since fleet supply has remained constrained due to carmakers' persisting supply chain issues,” S&P said in a statement.

The agency warned that weaker European consumer sentiment in 2023 could hurt the company’s earnings and cash flows, but it expects Europcar to keep its credit metrics in line with the B+ rating.

The outlook is stable.

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