Research: Rating Action: Moody’s downgrades Grupo Antolin to B3; stable outlook

Frankfurt am Main, September 19, 2022 — Moody’s Investors Service (“Moody’s”) today downgraded the corporate family rating of Grupo Antolin-Irausa, SA (Grupo Antolin) from B2 to B3 and the probability of default rating at B3-PD from B2 -PD. Simultaneously, Moody’s downgraded Grupo Antolin’s senior secured notes from B3 to B2. The outlook remains stable.

“The downgrade was driven by Grupo Antolin’s inability to improve profitability and credit metrics to the extent expected for the B2 rating category, due to a challenging environment for global auto parts suppliers. , especially those with a strong European focus, given cost inflation and moderate pricing power,” said Falk Frey, senior vice president at Moody’s and principal analyst for Grupo Antolin. liquidity profile provides some cushion, but we expect a gradual improvement in operating performance over the coming quarters to support the credit metrics required for the B3 rating category,” continued Frey.

A full list of affected ratings can be found at the end of this press release.


Grupo Antolin’s margin and leverage have been below the requirements of the previous B2 rating category for some time and we do not expect the company to be able to recover these key credit metrics within 12 next 18 months to become more adequate for B2. rating level given the current inflationary environment with high raw material, energy and logistics costs and weakened consumer confidence. Grupo Antolin’s -0.1% EBITA LTM ​​margin is well below the 2.5% to 3.5% range for the B2 rating category. We expect Grupo Antolin to improve its EBITA margin to around 1% at the end of 2022 with little further improvement in 2023.

Additionally, Grupo Antolin burned a significant amount of cash in the first half. Reported FCF was -€29 million in Q2 and -€145 million in the first half of FY22. Negative FCF was driven by weak operating performance and high seasonal working capital investments offset by lower capital expenditure (4.2% of sales versus 5% for 2022). Although management expects a substantial release of working capital in the second half of 2022, Grupo Antolin will burn cash over the next three years in our Moody’s base case.

At the same time, a positive operational impact related to the realization of the negotiated price adjustments should improve the cash generation capacity in the second half. Moody’s notes that Grupo Antolin’s strong liquidity profile provides some protection against moderate negative free cash flow generation over the next few years. However, a rapid turnaround in profitability and free cash flow generation is needed given Grupo Antolin’s highly leveraged capital structure.

The B3 rating balances Grupo Antolin’s (1) strong position in the automotive interior products market, (2) size and scale as a Tier 1 automotive supplier, and (3) adequate liquidity.

The rating also reflects (1) Grupo Antolin’s exposure to the cyclicality of the global automotive industry; (2) a very competitive market environment for interior products, with relatively weak growth prospects and strong pressure on prices, reflected by an EBITA margin of 0.6% in 2021 (breakeven on LTM06 /2022) which was already low in 2019 (1.9%) before -Impact Covid; (3) its high gross leverage of 7.1x in 2021 and 7.4x on an LTM06/2022 basis; and (4) its low free cash flow (FCF), negative by around €150 million over the last five years and negative by €123 million in the first half of 2022, given its high capital expenditure and its low operating margin.


The stable outlook reflects our expectation of continued progress in Grupo Antolin’s financial turnaround, which should lead to more adequate financial metrics for the B3 rating level in the coming quarters, for example an improvement in the EBIT margin to around 1 % and less than 6x leverage. Nevertheless, in the absence of significant debt maturities, we expect Grupo Antolin’s liquidity profile to remain adequate.


Grupo Antolin’s ratings could come under upward pressure in the event of (1) a sustained reduction in leverage (debt/Ebitda) below 5.5x; (2) an EBITA margin permanently above 2.5%; (3) interest coverage (EBITA/interest expense) well above 1.0x as well as (4) positive free cash flow on a sustainable basis.

The B3 rating could be lowered in the event of (1) Grupo Antolin’s inability to sustainably improve its EBITA margin above 1.0%, or (2) leverage (Debt/Ebitda) remaining above 6, 5x; (3) interest coverage does not materially improve towards 1.0x and (4) a significant negative FCF beyond the double-digit amounts expected for the next two years or (5) a weakening of the liquidity profile of Grupo Antolin.


At the end of June 2022, the company’s cash balance was approximately €273 million, in addition to the availability of its revolving credit facility (RFC) of €194 million with sufficient margin under its maintenance commitments. Net debt/Adjusted EBITDA test levels are gradually tightened from 4.5x (in Q3 2022) to less than 3.5x from Q1 2023.

Grupo Antolin has no major debt maturities until 2025 and only minor amounts of short-term debt come due, most of which are revolving credit facilities that are typically rolled over. Compared to previous assumptions, we expect the group to generate negative free cash flow in excess of €100 million for 2022 and high double-digit negatives thereafter.


..Issuer: Grupo Antolin-Irausa, SA


…. LT Corporate Family Rating, downgraded from B2 to B3

…. Default scoring probability, downgraded to B3-PD from B2-PD

….Senior Regular Secured Bond/Debenture, downgraded from B2 to B3

Outlook Actions:

….Outlook remains stable


The main methodology used in these ratings is Automotive Suppliers published in May 2021 and available on Otherwise, please see the Scoring Methodologies page on for a copy of this methodology.


Based in Burgos, Spain, Grupo Antolin is a family-owned, tier-one supplier to the automotive industry. It focuses on the design, development, manufacture and supply of components for vehicle interiors, including cockpits, ceilings (headliners), door trim, interior lighting and electronic components. In 2021, Grupo Antolin achieved a turnover of almost 4.1 billion euros.


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Falk Frey
Senior Vice President
Corporate Finance Group
Moody’s Deutschland GmbH
An der Welle 5
Frankfurt am Main, 60322
JOURNALISTS: 44 20 7772 5456
Customer service: 44 20 7772 5454

Christian Hendker, CFA
Associate General Manager
Corporate Finance Group
JOURNALISTS: 44 20 7772 5456
Customer service: 44 20 7772 5454

Release Office:
Moody’s Deutschland GmbH
An der Welle 5
Frankfurt am Main, 60322
JOURNALISTS: 44 20 7772 5456
Customer service: 44 20 7772 5454

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