Loxam与Kilotou：观望模式

Restricted - External James Alistair Cawthorpe+ 44 (0) 20 8773 5888james.cawthorpe@barclays.comBarclays, UKRidita Noboni44 (0) 20 7773 6122ridita.noboni@barclays.comBarclays, UK FIGURE 1. Loxam quarterly revenue evolution y/yFIGURE 2. Loxam quarterly EBITDA evolution y/ySource: Company reports, Barclays Research•Kilotou:EBITDA fell by -3.6% y/y in Q1 (at constant perimeter) to €94.1mn (IFRS), led byFrance -6% y/y, which wasoffsetpartially by International growing by +1.7% y/y. Franceremains at the core of Kilotou's operations, generating 60% of revenue, and the companyguided to a challenging construction market, weighing on the opportunities for pricing. Onthe outlook, management pointed todifficultmarket conditions persisting in France,Germany and Poland (dependent on EU subsidies), with prospectsdifficultto gauge givenhigh levels of uncertainty. In contrast, Spain, Portugal and Denmark continued their positivetrends since last summer, and management remained more confident on the months ahead.Overall, Kilotou remains cautious and focused on sales growth outside the constructionsegment while maintaining cost discipline.Despite the weakness, FCF generation for both Loxam and Kilotou helped to stabilise leverage( Figure 3).•Loxamgenerated positive FCF of €46mn in Q1 (co. reported, vs -€2mn in Q1 24), aided bylower gross capex and changes in working capital related to fixed assets compared to theprior year. This allowed total leverage to remain relatively stable at 4.36x (vs 4.34x in Q4).Nonetheless, capex will now increase over the coming quarters, and the companyreaffirmedits FY25 guidance of €300mn, vs. €280mn for FY24.•Kilotougenerated positive FCF of €16.4mn (vs. -€19.9mn in Q1 24), also aided by lower fleetcapex. Kilotoureaffirmedits guidance to reduce its total capex by -20% versus 2024, but keptthe option to revise this should it need to. Kilotou kept its leverage broadly stable in Q1 25 at3.73x, vs 3.75x in FY24 and 3.78x in Q1 24 and said it was comfortable with current levels,viewing below 4x as manageable.2 Source: Company reports, Barclays Research29 May 2025 Remaining refinancing next up for Loxam:consistent with our previous view, the companyreaffirmedits intention to refinance the April 2026s in the coming months and are monitoringbond markets currently. Following its refinancing process in January, Loxam is nowleftwith onebond maturity to deal with this year, its 2.875% 2026 SSN bond, and it had previously indicatedit may also look to address its remaining 4.5% SUN 27s (€183mn outstanding). Both bonds arecallable anytime at 100. We think Loxam would continue to have a preference for issuingsecured debt in the future, as it addresses the remaining 2027 unsecured bonds within itscapital structure. With leverage now comfortable at around 4.36x, we see no need for thecompany to issue more unsecured debt in the current market. As a reminder, the companyissued 2027 unsecured bonds back in 2019 to fund the acquisition of Ramirent (its largesttransformational acquisition in recent years).Relative value•Loxam bonds are unchanged across the structure post the publishing of its Q1 results. Thefront end is still trading c.40-70bp wider compared to before 'Liberation Day', while the longend is broadly flat, having retraced from the recent wides. Wereiterate our UW rating on thelong end of the LOXAM 29s/30s curve, given the little spread compensationofferedfor theuncertain earnings backdrop. Wereiterate our MW rating on the remainder of thecurve,given the company's relatively low leverage and track record of refinancingsuccessfully.•KILOTO 5% €31sare trading at c.101.375 (Z+245 / 4.6% YTW), having repriced by +0.25ptafterresults. The notes have outperformed the PE HY Industrial Index since 'Liberation Day', havingtightened by c.20bp (vs. 4bp for the index).We reiterate our MW ratingon both the fixed 31sand FRN 30s, as we see the spread compensation as better when compared to Loxam, andnote the company has less exposure to the Nordics, but equally we have little conviction on ameaningful earnings inflection from here.•Accordingly, we recommend aswitch out of LOXAM €30s (UW) into KILOTO 5% €31s (MW),given investors can pick up 60bp in Z-Spread (versus the averagedifferentialof 46bp).3 Kiloutou operational reviewQ1 results•Revenue of €298.0m, +1.2% vs Q1 24 (-1.1% y/y at constant perimeter). France down by -1.7%y/y & international up by + 6% y/y (0% y/y on a constant perimeter).•EBITDA of €94.1m, -0.6% vs Q1 24 (-3.6% y/y at constant perimeter). France down by -6.0% y/y& international up by + 9.6% y/y (+1.7% at constant perimeter).•EBITDA margin of 31.6% (-0.6pts vs Q1 24)•Reported FCF of €16m vs.-€20.6mn in Q1 24, supported by lower capex. Net debt stood at€1,874.9m vs. Q4's €1895.7. Net leverage of 3.73x was slightly lower than Q4's 3.75x 4 •Cash balance of €98.1mn vs. €79.3 in Q4. €180mn undrawn RCF vs €148mn in Q4.Call takeaways•Spain, Portugal and Denmark are performing well, continuing their posi