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Investing.com -- S&P Global Ratings has upgraded Italian construction company Webuild SpA to ’BB+’ from ’BB’ with a stable outlook, citing improved credit metrics and solid operating performance.
The rating agency expects Webuild to deliver EBITDA growth from 2025 to 2027, supported by its substantial order backlog of €59 billion, disciplined contract management, and ongoing cost-efficiency programs. The company reported a 22% revenue increase in the first half of 2025 compared to the same period last year, following a 19% top-line growth in 2024.
S&P forecasts Webuild’s adjusted EBITDA to reach €1.1 billion-€1.3 billion in 2025-2026, up from €978 million in 2024. The company’s EBITDA margins are expected to improve to 9.0%-9.4% in 2025 and further strengthen to 9.5%-10.0% in 2026-2027, compared to 8.3% in 2024.
The rating agency noted that approximately 90% of Webuild’s order backlog and revenue now come from countries with low geopolitical and economic risk, a significant increase from 59% in 2018. This strategic shift has been supported by acquisitions and expansion in Italy and Australia.
S&P anticipates that funds from operations (FFO) to debt will stand at 55%-85% in 2025, before normalizing to 40%-60% in 2026 and 35%-50% in 2027. However, free operating cash flow (FOCF) is expected to remain negative over the next 12-24 months due to elevated capital expenditures and the reversal of advance payments.
The stable outlook reflects S&P’s expectation that Webuild will maintain adjusted FFO to debt of at least 35%-40%. The rating agency also expects the company to curb its gross debt in the coming years, which increased to €2.9 billion in December 2024 from €2.6 billion in December 2023.
A potential future upgrade would depend on Webuild maintaining an adjusted EBITDA margin near 9%, continuing its track record of on-time project delivery, keeping FFO to debt comfortably above 35%-40%, and achieving sustainably positive FOCF of at least 15% of adjusted debt on average.
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