Fitch revises Rovensa outlook to negative, affirms 'B-' rating

The following is a press release from Fitch Ratings: Fitch Ratings-Warsaw-08 October 2026: Fitch Ratings has revised the Outlook on Root Bidco S.a.r.l.'s (Rovensa) Long-Term Issuer Default Rating (IDR) to Negative from Stable and affirmed the IDR and senior unsecured rating at 'B-'. The Recovery Rating on the notes is 'RR4'. The Negative Outlook reflects lower earnings expectations over the medium term and weaker prospects of Rovensa achieving neutral free cash flow (FCF) over the next 12-18 months. We have assumed Fitch-adjusted EBITDA for the current financial year to June 2027 (FY27) of around EUR150 million, rising to EUR175 million for FY29, after Fitch-adjusted EBITDA for FY26 was only around EUR126 million. EBITDA gross leverage was 10.3x for FY26, reflecting rising debt and weak earnings. Based on the forecast EBITDA, gross leverage could fall below 8x in FY29. Rovensa develops, manufactures and markets bio-solutions and crop protection for responsible and sustainable agriculture management. The business achieves robust EBITDA margins at around 19-20%, reflecting its specialty chemical focus. Key Rating Drivers Weak 2026 Earnings: The challenging macroeconomic environment and adverse weather conditions in some of Rovensa's key markets mean Fitch-adjusted EBITDA declined to around EUR126 million for FY26 from EUR153 million for FY25. Cash flow from operations is estimated in the mid- to low single digit millions. Net debt over the year increased by around EUR70 million, funding most capex, some non-operating cost items and costs for the refinancing completed in December 2025. EBITDA gross leverage rose above 10x. Weak Cash Flow Generation: The company pays around EUR125 million a year in cash interest and taxes. Given its growth ambitions, it will have to fund some working capital in years with sales growth and it continues reporting restructuring and other one-off costs on an ongoing basis (low double-digit millions). Considering the FY26 results, prospects of achieving neutral FCF on a sustained basis have weakened, which is reflected in the Outlook. Rovensa operates in a sector where weather conditions from year to year, crop prices and agricultural input prices affect farmer affordability, so that demand and price sensitivity of customers will fluctuate. High Absolute Debt: The current capital structure does not provide the flexibility to absorb earnings weakness every few years. For FY27 we have assumed EBITDA of EUR150 million rising to around EUR175 million by FY29, but actual earnings will show variations depending on market conditions across the agricultural sector in the Americas and Western Europe. Our rating forecast assumes that EBITDA gross leverage may drop below 8x in FY29. Challenges Continue in FY27: Fertilizer, energy, labor, equipment and financing costs have risen materially. Farmers are responding to lower margins by preserving cash and delaying purchases where possible. For some crops trade policy can create

Press Release: Fitch Revises Root Bidco S.a.r.l.'s (Rovensa) Outlook to Negative; Affirms at 'B-' -2