S&P changes Nemera view to negative

S&P said it revised the outlooks for Nemera and its parent Financiere N to negative from stable and affirmed the B ratings on the companies and the group’s senior secured bank facilities.

Nemera started implementing a turnaround plan earlier this year. S&P changed the outlook to reflect it may downgrade Nemera within the next 12 to 18 months if it doesn’t see any tangible benefits from the plan. S&P believes the plan’s associated costs will be around €6.5 million.

“A lack of near-term refinancing risks leaves room for the implementation of the turnaround plan. Given the long-dated maturity profile (no significant maturities until January 2025) of the capital structure following the refinancing earlier in the year, and sufficient level of liquidity, we think that there is room for the group to execute its turnaround plan,” said S&P in a press release.

The company’s year-to-date reported operating margins weakened markedly to 13.7% (after exceptional costs) from 15.4% a year ago. Gross debt leverage stood at 7.9x (based on a rolling 12-month EBITDA of €66.2 million as of Oct. 31). “The company’s performance was affected, with overall EBITDA trailing budgeted levels by €10.3 million, due to high equipment and process inefficiencies across most of its production facilities,” S&P said.

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