Grammer : Euler Hermes reaffirms Grammer AG’s investment-grade rating

Amberg, June 26, 2019 - Euler Hermes Rating GmbH has confirmed its investment grade rating for Grammer AG in its latest report. However, the rating has been lowered from BBB to BBB-. The main reason for this was the higher debt levels following the acquisition of Toledo Modling & Die. Inc. and the mounting market challenges facing the Automotive Division. Euler Hermes expects the rating to remain stable over the next 12 months thanks to the good order books of GRAMMER AG.

Grammer AG's current rating also reflects its solid funding as well as the resulting high financial flexibility.

Euler Hermes also highlights the Grammer Group's strong global footprint comprising development and production capacities in the main regions around the world. In addition, the Group's technology and quality leadership in the core segments is viewed as a strategic advantage in the light of relevant trends such as autonomous driving, mobility concepts, digitization and the increasing electrification of vehicles.

It projects moderate medium to long-term global growth in sales of passenger and commercial vehicles, from which Grammer stands to benefit as a supplier of components.
The rating agency considers the Company's diversification across various products, customers and regions to constitute a further strength.

Euler Hermes Rating sees the acquisition of Toledo Molding & Die, Inc. as improving Grammer's diversification profile and strengthening its access to the NAFTA market.

In summary, the rating agency still considers the business risk to which Grammer AG is exposed to be slightly elevated. In the opinion of the analysts, the financial risk is moderate, although earnings potential and profitability weakened in 2018 due to WLTP-related declines in revenue and acquisition expenses. In addition, Grammer AG has good structures, processes and systems for addressing operational risks.

Company profile

Located in Amberg, Germany, Grammer AG specializes in the development and production of components and systems for automotive interiors as well as suspended driver and passenger seats for onroad and offroad vehicles.
In the Automotive Division, we supply headrests, armrests, center console systems, high-quality interior components, operating systems and innovative thermo-plastic solutions to premium automakers and automotive system suppliers.
The Commercial Vehicles Division comprises seats for the truck and offroad seat segments (tractors, construction machinery, forklifts) as well as train and bus seats.
With round about 15,000 employees, Grammer operates in 19 countries around the world. Grammer shares are listed in the Prime Standard and traded on the Frankfurt and Munich stock exchanges via the electronic trading system Xetra.

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