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Scope affirms B+/Stable rating on AutoWallis Nyrt.
The latest information on the rating, including rating reports and related methodologies, is available on this LINK.
Rating action
Scope Ratings GmbH (Scope) today affirmed AutoWallis Nyrt.’s issuer rating at B+/Stable. Scope has also affirmed the senior unsecured debt rating at B+.
The full list of rating actions and rated entities is at the end of this rating action release.
Key rating drivers
Business risk profile: BB- (unchanged). AutoWallis' expansion and diversification in Central Europe continue to support the business risk profile. AutoWallis’ organic and inorganic growth remains robust, recording a substantial 44% compound annual growth rate over 2020-2024. The group also benefits from a consolidated presence in premium brands, notably BMW (over 50% market share in Hungary and Slovenia) as well as good chances to expand further given the highly fragmented market. Nevertheless, with 2024 revenues of EUR 0.9bn, the Group remains a minor entity within the broader retail industry. Despite outlining ambitious expansion plans last year, the issuer scaled them back for 2025 in light of the turbulent macroeconomic environment. While significant acquisitions, partly funded by a EUR 20m bond issuance in December 2024, bolstered its presence in the Czech Republic in 2024, the company will resume its expansion strategy in 2026.
Diversification is a positive rating driver. The group is present in several central European countries, with 40% of revenue in 2024 generated in its domestic market of Hungary, followed by Slovenia, the Czech Republic and Croatia.
AutoWallis’ profitability, measured by the Scope-adjusted EBITDA margin*, remained above 5% from 2022 to 2024, largely driven by higher average car prices resulting from supply chain disruptions. Scope anticipates a decline to around 4% in 2025, driven by a less advantageous pricing mix and rising staff and sales expenses. Scope forecasts a return to around 5% from 2026, as key manufacturers such as Opel begin to offer a more favourable pricing mix and premium brands as BMW and Mercedes, recently added to the issuer retail portfolio, are expected to boost gross margins. Moreover, the issuer is implementing cost efficiency initiatives, which Scope projects to support profitability in 2026 and thereafter.
Financial risk profile: B+ (unchanged). AutoWallis’ FRP is the major rating constraints.
Leverage, measured by the debt/EBITDA ratio, increased to 4.4x in 2024 from 2.7x in 2023. This was primarily driven by the anticipated expansion phase, which included a EUR 20m bond issuance in 2024, coupled with slower EBITDA growth. Scope anticipates debt/EBITDA will remain above 4x through 2025, driven by stable EBITDA amid compressed margins and elevated sales/IT development costs. These investments are set to enhance EBITDA from 2026, coinciding with the renewed expansion, and leverage is projected to drop below 4x after 2026. New financing in 2026 and 2027 is expected to align with operational growth, with rising EBITDA offsetting the increased debt.
Scope projects interest cover to decline in 2025 to around 4x, from 9.9x in 2024, settling in a range between 4x and 5.5x in Scope’s rating case. This will be driven by higher leasing obligations and the EUR 15m/HUF 6bn bank debt issued in January 2025, which was secured for working capital and investment needs. While total debt is expected to rise further in 2026 and 2027 alongside anticipated operational growth, Scope expects EBITDA to offset the associated increase in interest expense.
Free operating cash flow/debt is anticipated to remain negative in the medium to long term, driven by the ambitious capex plan (averaging HUF 16bn in 2025-2027) and negative net working capital.
Liquidity: adequate (unchanged). AutoWallis’ liquidity is adequate considering that a substantial part of its short-term debt is inventory financing. Inventory loans and reverse factoring are repaid when inventory is sold, and the direct financing of each vehicle ensures that each loan is 100% covered by that vehicle.
Scope highlights that AutoWallis’ two senior unsecured bonds issued under the Hungarian National Bank’s Bond Funding for Growth Scheme have a covenant requiring the accelerated repayment of the outstanding nominal debt amount (HUF 9.7bn) if the debt rating of the bonds stays below B+ for more than two years (grace period) or drops below B- (immediate repayment). Such a development could adversely affect the company’s liquidity profile. The rating headroom to entering the grace period is zero notches. Scope therefore sees a moderate risk of the rating-related covenant being triggered.
Supplementary rating drivers: credit-neutral (unchanged). Overall, supplementary rating drivers have no impact on this credit rating.
Outlook and rating sensitivities
The Stable Outlook reflects Scope’s expectation that leverage will remain at around 4x in 2025 and 2026.
The upside scenario for the ratings and Outlook is:
- Debt/EBITDA significantly below 4x on a sustained basis
The downside scenario for the ratings and Outlook is:
- Debt/EBITDA significantly above 5x on a sustained basis
Debt rating
Scope has affirmed the B+ rating of the senior unsecured debt issued by AutoWallis. The recovery analysis is based on the liquidation value in a hypothetical default scenario in 2027, resulting in HUF 135bn available to creditors after deducting 10% administrative claims. This compares to HUF 128bn senior secured debt (trade payables and inventory financing) and HUF 18bn senior unsecured loans with an average recovery rate (38%).
AutoWallis has two bonds issued under the Hungarian Central Bank’s Bond Funding for Growth Scheme. In April 2020, the company issued a HUF 3bn senior unsecured bond (ISIN: HU0000359476). The bond has a tenor of 10 years and a fixed coupon of 3.0%. Bond repayment is in one tranche at the maturity date in April 2030. In July 2021, AutoWallis issued a HUF 6.7bn senior unsecured green bond (ISIN: HU0000360664). The bond has a tenor of 10 years and a fixed coupon of 3.0%. Bond repayment is in five tranches starting in 2026 (10% of face value payable each year from 2026 to 2030) and 50% balloon payment in 2031.
Environmental, social and governance (ESG) factors
Overall, ESG factors have no impact on this credit rating action.
All rating actions and rated entities
AutoWallis Nyrt.
Issuer rating: B+/Stable, affirmation
Senior unsecured debt rating: B+, affirmation
The rating was prepared following Scope’s Retail and Wholesale Rating Methodology, 26 April 2024. The application of the Retail and Wholesale Rating Methodology, 25 June 2025, does not have an impact on the rating.
*All credit metrics refer to Scope-adjusted figures.
Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.
Methodology
The methodologies used for these Credit Ratings and Outlook, (General Corporate Rating Methodology, 14 February 2025; Retail and Wholesale Rating Methodology, 25 June 2025), are available on https://scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on https://www.scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at https://scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at https://www.scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on https://scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.
Solicitation, key sources and quality of information
The Credit Ratings were not requested by the Rated Entity or its Related Third Parties. The Credit Rating process was conducted:
With the Rated Entity or Related Third Party participation YES
With access to internal documents YES
With access to management YES
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings' internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and Outlook and the principal grounds on which the Credit Ratings and Outlook are based. Following that review, the Credit Ratings and Outlook were not amended before being issued.
Regulatory disclosures
These Credit Ratings and Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and Outlook are UK-endorsed.
Lead analyst: Claudia Aquino, Associate Director
Person responsible for approval of the Credit Ratings: Sebastian Zank, Managing Director
The Credit Ratings/Outlook were first released by Scope Ratings on 18 September 2019. The Credit Ratings/Outlook were last updated on 3 July 2024.
Potential conflicts
See www.scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.
Conditions of use/exclusion of liability
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