November 28, 2024 11:56 GMT
CONSUMER CYCLICALS: Dometic; S&P affirms at BB- stable
CONSUMER CYCLICALS
(DOMSS; Ba2 Neg/BB- Stable)
- Recovery revised down from 60% to 55% (debt is unsecured)
- Stable outlook given it sees bottom in revenue and margins in 2025 and notes co's deleveraging target (reports net ex. leases at 3x vs. target around 2.5x).
€26s trade at 3.9%/Z+168
€28s at 5.1%/Z+300 on low cash px of €89
We will circle back on but 3Q results were rough; sales -14% and adj. EBIT margin -570bps. It's over 40% exposed to OEMs where it manufactures customised solutions (segment is falling -20%). 30% is in standard retail/distribution channel and another 30% in servicing - both also facing low-double-digit falls. It still sees "long-term trends in Mobile Living as strong" (S&P has RV related - i.e. refrigerators, ventilations and other appliance-linked exposure - at 21% of sales) - done from 47% in 2017 and a credit positive.
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