S&P turns Tarkett outlook to stable

S&P said it revised its outlook for Tarkett Participation to stable from negative and affirmed its B+ ratings on the company and its debt.

“Tarkett has achieved sound performance and cash flows despite a challenging sector outlook. In the first nine months 2023, Tarkett reported organic sales growth of 4.7% compared to last year. The positive trend continued into the third quarter with organic growth of 6%. The revenue growth is driven primarily by the sports segments, as well as the Commonwealth of Independent States (CIS) and Latin American regions; North America is holding well while Europe is showing negative growth,” S&P said in a press release.

The agency said it estimates Tarkett’s S&P Global Ratings-adjusted debt to EBITDA at about 4.8x-4.9x in 2023-2024, down from 6.5x in 2022.

“The stable outlook reflects our expectation that Tarkett's segment diversification and positive inflation balance will continue to support the group's performance despite challenging macroeconomic conditions, leading to FFO to debt of 13%-14% and free operating cash flow (FOCF) of over €40 million in 2023-2024,” S&P said.

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