(Finance) – S&P Global Ratings has revised theoutlook on LeonardoItalian defense big, to “positive” from “stable” and confirmed the rating “BBB-” . The positive outlook reflects the expectation that Leonardo’s operating performance will remain resilient over the next 12-24 months, with solid cash flow used to reduce leverage and improve credit metrics.
“We believe that Leonardo’s solid results in the first half of 2024, together with the deleveraging prospects and the momentum of the defense sector, will support a resilient performance in 2025 and should lead to improved credit metrics,” the report said.
The rating agency also indicates that management has given a clear indication that it intends to reduce debt Leonardo, thus strengthening credit metrics to levels commensurate with a higher rating. Funds from operations to debt are forecast to approach 45% in 2024 and potentially increase in 2025, mainly driven by debt reduction and supported by a gradual improvement in EBITDA margins to above 11% and solid free operating cash flow.