EU CAPITAL GOODS: Altrad: Credit Profile
Jun-11 14:49
(-/BBB-/-)
- 97% owned by founder and President Mohed Altrad. Mr Altrad was found guilty of corruption charges in 2022 and will be retried following an appeal. A conviction could impact public procurements. Some financing agreements can be terminated in the case that Mr. Altrad and his heirs cease to hold 51%.
- 84% Industrial services, 16% construction equipment. It emphasises growth exposure to infrastructure and net zero investments.
- 40% continental Europe, 31% UK.
- Diversified customer base. Heavily exposed to the Energy sector at 46% of revenue.
- Services runs on a multi-year contracting model, with only 8% of revenue on a contractual fixed price basis.
- 73% of service revenue is customer opex which is perceived as more persistent than opex. It reports a 75-80% renewal rate.
- Capital allocation is flexible, including self-financed M&A and debt reduction.
- FY24 revenue €5.5bn, EBITDA €620m (11.2%), FCF €340m.
- 2025-2027 outlook products 3% organic revenue CAGR, ~11% EBITDA margin maintained, capex of 2-2.5% of revenue and €1bn+ cumulative FCF.
- Reported leverage is 1x, with a 1-1.5x policy, aligned with IG rating. That is on a pre-IFRS 16 basis, post is 1.2x. S&P sees 2.4x FY24 adjusted net leverage including a vendor loan on Mr. Altrad’s personal holding. It has a 3x ratings ceiling.
- FFO/adj. debt is seen at 29% / 31% for FY25 / 26, leaving little room against a downgrade trigger of persistently below 30%.
- S&P highlighted leading market positions, above average margins and bidding advantage of vertical integration, contract structure and flexible cost base.
- UOP: GCP including refinancing bridge and term loans.
- 125bp step up/down on sub-IG downgrade/upgrade. CoC.
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US TSY FUTURES: BLOCK: Jun'25 5Y Buy
May-12 14:46
- +10,000 FVM5 107-20.5, buy through 107-20.25 post time offer at 1027:55ET, DV01 $420,000.
- The 5Y contract trades 107-21.25 last (-13.75).
GOLD: Pullback Still Corrective For Now, Long Positioning Continues To Moderate
May-12 14:35
The pullback in the USD and major equity benchmarks helps spot gold away from session lows, but gold remains 2.45% lower on the session at $3,240/oz amid the latest easing of US/China trade tensions. Today's pullback still appears corrective for now, with key short-term support at $3,202.0 untested during the earlier selloff. A clear break of this level is required to signal scope for a deeper retracement, with the primary uptrend still intact. Initial resistance is the May 7 high at $3,435.6.
- Positioning continues to moderate from recent extended extremes. The latest COT CFTC report covering the week to May 6 saw a third consecutive fall in non-commercial net longs, with MNI’s 52-week Z-score moving to -2.7, from a multi-year low of -2.8 the week prior.
- There have been familiar dynamics in key sources of gold demand according to latest data from the World Gold Council (WGC):
- There were 115 tonnes of ETF inflows in April, led by Asia (70 tonnes) and North America (44 tonnes). Preliminary data from the WGC suggests light net sales of gold ETFs in the first two weeks of March - likely profit taking amongst investors.
- Meanwhile, March saw another healthy bout of central bank demand, with 35 tonnes of net purchases (vs 25 tonnes in February) led by Poland and Azerbaijan.
- However, price rises are still eating into jewellery demand, which was down ~20% Y/Y in Q1.
UK DATA: MNI UK Labour Market Preview: May 2025 Release
May-12 14:17
- Official UK labour market data has fallen in priority over the past few months, but it still has the potential to be very market moving.
- We look ahead to this month's print and also look at the key part of the BOE's MPR with respect to labour market data.
