S&P Rating Action
In light of the impacts of the Covid-19 pandemic S&P downgrades Indigo Group from BBB to BBB- with a negative outlook
S&P Global Ratings revised its rating of Indigo Group on May 14th 2020 from BBB to BBB- with a negative outlook due to the impacts of the Covid-19 pandemic. Temporary mobility restrictions, related to the containment and social distancing measures taken by authorities to contain the pandemic worldwide, have significantly reduced mobility, affecting all transport sectors, particularly parking. However, a modal shift to the car can be envisaged once out of containment.
These temporary decreases in volume will affect performance in 2020, although the Indigo Group will control its costs to minimize the impact. The Group also has excellent liquidity, with €308m of cash at March 31st 2020 and €300m of undrawn RCF. It should also be noted that its bond debt is not subject to any covenant. The Group has no need to access the short and medium-term capital markets, as the first maturity of its bonds is in April 2025. This liquidity will enable the Group to get through this period with confidence, while continuing in 2020 its strategy of major investments started over the past years by taking advantage of new opportunities that may arise after Covid-19, before returning to a more measured program from 2021-2022. In 2019, the Group, which had made substantial investments, notably with the acquisition of SPIE Autocité, maintained ratios comfortably above the guidelines given by S&P to maintain BBB rating, with an FFO/debt of 11.8% and an adjusted EBITDA margin of 47.9%.
Numerous uncertainties remain as to the duration of the pandemic and health measures, and therefore their impact on the economic environment and purchasing power. Nevertheless, S&P anticipates a faster recovery of the Group's activity than that of other operators in the transport sector, as individual mobility should be favored. In addition, as S&P points out, the Group benefits from a portfolio of mainly concessive contracts with assets mainly located in city centers and shopping malls, with little exposure to generators in the travel and tourism sectors (airports, train stations, etc.). The Group has also begun discussions with its principals to redefine the economic balances of contracts that are currently being disrupted, as the legal environment of concessions offers better guarantees in this respect than in the case of leases in difficult contexts.
As a result, financial leverage should increase significantly in 2020 before returning to more usual levels as of 2021-2022 with the contemplated recovery. The Group, wishing to maintain a solid Investment Grade rating, will conduct its investment and dividend policy to respect the defined thresholds. The Group will rely on its large portfolio of existing infrastructure contracts (87%1 of Global Proportionate EBITDA in 2019), its sector and geographic diversification in 12 countries and the investment opportunities that will arise.
The full S&P Global Ratings rating is available at Credit Rating
Excluding MDS business unit that gathers OPnGO and INDIGO®weel, along with the IFRS 16 impact
|Analysts / investors contact:||Press contact:|
|Noe Poyet||Benjamin Voron|
|Tél: +33 1 49 03 13 04||Tel: +33 1 49 03 15 90|
|firstname.lastname@example.org ||benjamin.voron @group-indigo.com|
About reported financial figures
To make its performance easier to understand and to improve its presentation, the Group presents operational figures (revenue, EBITDA, operating income) on a “global proportionate” (GP) basis, including the Group's share of joint ventures (mainly in the USA, Colombia, Panama and Smovengo) as if they were consolidated proportionately and not under the equity method applied in accordance with IFRS when preparing the consolidated financial statements.
About Indigo Group
Indigo Group, holding about 100% of Indigo Infra, OPnGO and INDIGO® weel, is a key global player in car parking and urban mobility, that manages more than 2.4 million parking spaces and related services in 12 different countries. As of 31 December 2019, Indigo Group revenues and EBITDA amounted to €968.6 million and €351.3 million respectively (Global Proportionate figures).
Indigo Group is held at approximately 47.2% by Crédit Agricole Assurances, 32.9% by Vauban Infrastructure Partners, 14.2% by MEAG, 0.5% in treasury shares and the remainder by the management of the Group.