S&P Revises Omnia Outlook to Negative on Debt Concerns

Key Summary of S&P's Revision

S&P Global Ratings has revised its outlook on Omnia Technologies to negative from stable while affirming the company's 'B' rating. The change is primarily driven by slower-than-expected debt reduction and downward revisions to financial forecasts for 2025-2026.

Financial Performance and Projections

The rating agency noted that Omnia's debt-to-EBITDA ratio is now projected to approach 6.0x in 2026, a full year later than initially forecasted. S&P has lowered its 2025 revenue forecast for Omnia by approximately 4% to €760 million, attributing this to postponed orders and lower-than-expected contributions from acquisitions.

Cash Flow and Potential Downgrade

Omnia's free operating cash flow for 2025 is estimated to remain negative at nearly €30 million, though this is an improvement from the previous year. The negative outlook signals reduced headroom under the current rating and raises the possibility of a downgrade within the next 12 months if deleveraging continues to lag or cash flow remains weak.

Outlook and Conclusion

While profitability metrics are showing signs of improvement, the delayed deleveraging remains a key concern. S&P anticipates free operating cash flow will turn positive in 2026, but Omnia faces significant pressure to meet its revised financial targets to maintain its current credit rating and avoid a downgrade.

FAQ

Q: Why did S&P change Omnia's outlook?
A: S&P revised the outlook to negative due to Omnia's slower-than-anticipated debt reduction and lowered revenue forecasts for 2025.

Q: What is the new debt-to-EBITDA forecast for Omnia?
A: S&P forecasts the debt-to-EBITDA ratio will approach 6.0x in 2026, a year later than previously expected.

Source: Investing.com