Fitch affirms Amber HoldCo (Applus) 'B+' rating, outlook stable

The following is a press release from Fitch Ratings: Fitch Ratings-Barcelona-08 October 2026: Fitch Ratings has affirmed Amber HoldCo Limited's (Applus) Long-Term Issuer Default Rating (IDR) at 'B+' with a Stable Outlook. Fitch has also affirmed the senior secured rating of the financing subsidiary Amber Finco Plc at 'BB-', with a Recovery Rating of 'RR3'. The rating is constrained by high leverage after the term loan B (TLB) add-on in February 2026 to fund the APEM acquisition, which will push EBITDA leverage above the negative sensitivity at end-2026. Fitch views APEM as complementary to the business profile. Rating strengths are Applus's solid business profile in testing, inspection and certification, which benefits from limited cyclicality, sound customer diversification, long-standing customer relationships, low churn and a strong brand. The Stable Outlook reflects our expectation that Applus will delever from 2027, supported by EBITDA growth and a rising free cash flow (FCF) margin. Fitch forecasts further bolt-on acquisitions funded from internal cash flow. Key Rating Drivers Leverage to Peak in 2026: Fitch forecasts EBITDA leverage of 6.2x at end-2026, up from 5.6x at end-2025, after the TLB add-on and revolving credit facility (RCF) drawdown. This is high for the rating and slightly above the negative sensitivity of 6.0x. We expect the breach to be temporary, with leverage returning to 5.7x by end-2027. Applus remains on a deleveraging path over the medium term, supported by EBITDA growth from higher revenue and operational improvements.. We expect further bolt-on M&A from internal cash generation, but additional debt-funded transactions would likely lead to negative rating action. New Environmental Division Adds Diversification: The new division established in February 2026 broadens Applus's end-market and geographic mix. Built around APEM and the bolt-ons of Ambiente in Italy and CSA in the US, it generated EUR80 million of revenue in 1H26, or 6% of group sales. APEM provides environmental consultancy to regulated water, renewables and marine infrastructure clients, with over 60% of revenue from multi-year programmes and recurring projects. Stricter environmental regulation and the energy transition support demand, but the division remains small against the rest of the group. Acquisitions to Continue: Fitch expects Applus's FCF to support further bolt-on M&A over the medium term in emerging markets with higher growth prospects and margins, in line with its strategy to broaden its global footprint and expand end-markets. Execution risk is low, given Applus's record of integration and profitability improvements. The group completed five acquisitions in 1H26 and one in July in the environmental and laboratories divisions. We do not forecast large debt-funded M&A, which would lead to negative rating action if undertaken before leverage falls within sensitivities. Improving FCF Generation: The Fitch-calculated FCF margin was 1.1% i