The latest information on the rating, including rating reports and related methodologies, is available on this LINK.

Rating action

Scope Ratings GmbH (Scope) has affirmed the B/Stable issuer rating on Trans-Sped Kft (Trans-Sped) and the B+ rating on the issuer’s senior unsecured debt.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Business risk profile: B (unchanged). The business risk profile remains supported by the issuer’s well-diversified service offering and customer portfolio. Credit constraints include the deteriorating operating profitability, limited size in a market dominated by multinational companies and low geographical diversification.

Revenues increased by 9% to HUF 34.2bn in 2024 and Scope forecasts further modest growth until 2026. This growth was despite shrinking volumes in Hungary’s freight and logistics market in the last two years owing to sluggish economic growth and lower consumer spending. The issuer’s revenues remain among the top 20 in Hungary’s logistics and transport sector, a market led by major multinationals such as Waberer’s, DHL and Duvenbeck.

The service offering has become more diversified, although still centred on transport and logistics. Investments over the past two years have been aimed at expanding into new, higher value-added businesses (real estate, warehousing and e-commerce) and modernising the existing fleet. Customers are well-diversified, stemming from diverse industries such as automotive, pharmaceuticals, machinery and retail, whose different demand patterns (discretionary and non-discretionary) help to offset shifts in end-market demand. Geographical diversification remains limited (Hungary and Central and Eastern Europe), which makes the issuer vulnerable to adverse macroeconomic developments.

Trans-Sped's Scope-adjusted EBITDA margin* was 5.8% as per the preliminary 2024 financial statements, which is below historical averages (7%-9%). Negative macroeconomic developments have begun to exert more pressure on transport margins, increasing both competition and transport costs (tolls, fuel costs, taxes). Scope expects the sector to recover after 2025, stimulating demand and resulting in a gradual improvement in Trans-Sped's margin, starting with 6% forecasted in 2025.

Financial risk profile: B (unchanged). The financial risk profile remains supported by the strong interest cover but constrained by high leverage and volatile cash flow cover.

EBITDA interest coverage continues to be the primary supportive element of the financial risk profile, and Scope expects it to remain above 5.0x. The metric was the same in 2024 as in 2023 (5.6x) despite lower EBITDA, due to lower interest payments from a limited financing of working capital. Beyond 2024, interest cover is expected to remain above 5.0x, with the assumed recovery of EBITDA by 2026 expected to offset a higher average interest rate. The higher interest rate going forward assumes: i) a higher financing of working capital than in 2024; and ii) a higher interest rate after the refinancing of the HUF 1.5bn long-term working capital financing line.

Leverage, as measured by debt/EBITDA, deteriorated to over 7.0x in 2024 due to weaker profitability and higher financial debt after HUF 1bn was added in 2024 (financial leasing). Beyond 2025, Scope forecasts a gradual deleveraging towards 6.4x by 2026 through recovering operating profitability driven by higher demand in the premium market.

Free operating cash flow (FOCF) has been negative in recent years due to intensive investment in property, plant and equipment, typically financed by external debt. In 2024, FOCF was higher than in 2023, mainly related to positive changes in working capital and lower capex (around HUF 2.0bn). Beyond 2024, Scope expects FOCF to remain at close to break even, though still under pressure from high maintenance capex of around HUF 2.2bn a year.

Liquidity: Adequate (unchanged). Liquidity is adequate, with liquidity sources forecasted to cover short-term debt of HUF 3.4bn (including a HUF 1.4bn short-term lease) and negative FOCF of HUF 57m forecasted for 2025. Sources of liquidity comprise HUF 801m of free cash and HUF 3.5bn of open, committed credit lines.

Scope notes that Trans-Sped’s senior unsecured bond, issued under the Hungarian National Bank’s Bond Funding for Growth Scheme, has a covenant requiring the accelerated repayment of the outstanding nominal debt amount (HUF 5bn) if the rating of the bond stays below B+ for more than two years (grace period) or drops below B- (accelerated repayment within 30 days). Such a development could adversely affect the company’s liquidity profile. The rating headroom to entering the grace period is zero notches. Given the unchanged tight rating headroom, the company must address its credit weaknesses to avoid entering the grace period or the more severe event of the debt rating being downgraded below B-.

Supplementary rating drivers: credit-neutral. Supplementary rating drivers have no impact on the issuer rating.

Outlook and rating sensitivities

The Stable Outlook reflects Scope's expectation that Trans-Sped’s credit metrics will develop in line with Scope's financial forecasts, supported by a stabilisation of the EBITDA margin at above 6%, albeit staying below historical averages (7-9%) in the coming years. Beyond 2024, Scope expects a gradual deleveraging, with debt/EBITDA improving towards 6.0x and EBITDA interest cover remaining consistently above 5.0x, while free operating cash flow generation remains under pressure from the relatively high maintenance CAPEX.

The upside scenario for the ratings and Outlook is:

1. Debt/EBITDA significantly below 6.0x

The downside scenarios for the ratings and Outlook are (individually):

1. No stabilisation of the EBITDA margin at above 6%
    
2. EBITDA interest cover below 3.0x
    
3. Negative FOCF for a prolonged period

Debt rating

Scope has affirmed the B+ rating of senior unsecured debt issued by Trans-Sped, one notch above the issuer rating. This is based on the ‘superior’ recovery assessment, constrained by potential volatility on the path to a default and the issuer’s ability to raise additional debt ranking above senior unsecured debt.

Senior unsecured debt currently consists of a HUF 5bn senior unsecured bond (ISIN: HU0000359500) issued in March 2020 under the Hungarian Central Bank’s bond scheme. The proceeds refinanced financial debt (HUF 2.8bn) and financed acquisitions (HUF 0.6bn) and capex (HUF 1.6bn). The bond has a tenor of 10 years and a fixed coupon of 2.5%. Bond repayment is in four tranches starting from 2026, with 7.5% of the face value payable yearly and a 70% balloon payment at maturity.

The recovery analysis is based on a hypothetical default scenario at YE 2026. Scope’s analysis used a liquidation scenario due to the asset-rich nature of the company, including fixed assets with high resale values (warehouses and the vehicle fleet). Following a valuation of all properties, a fair value adjustment of HUF 8bn was booked, starting from 2023. In 2024, all properties were revalued and fair value increased by around HUF 1bn compared to the 2023 level. The completion of the warehouse construction also eliminated execution risk and increased the fixed asset balance. These effects improved recovery expectations significantly, resulting in the ‘superior’ recovery for senior unsecured debt. This recovery rate normally allows for more than a notch of uplift against the issuer rating but Scope limited the uplift to one notch due to potential volatility in the capital structure on the path to default and the issuer’s ability to raise additional debt ranking above the senior unsecured debt.

Environmental, social and governance (ESG) factors

Overall, ESG factors have no impact on this credit rating action.

All rating actions and rated entities

Trans-Sped Kft.

Issuer rating: B/Stable, affirmation

Senior unsecured debt rating: B+, affirmation

*All credit metrics refer to Scope-adjusted figures.

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for these Credit Ratings and/or Outlook, (General Corporate Rating Methodology, 14 February 2025; European Real Estate Rating Methodology, 28 March 2024), are available on https://scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on https://www.scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at https://scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at https://www.scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on https://scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Credit Ratings were not requested by the Rated Entity or its Related Third Parties. The Credit Rating process was conducted:
With the Rated Entity or Related Third Party participation   YES
With access to internal documents                                       YES
With access to management                                                 YES
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity, and Scope Ratings' internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and/or Outlook and the principal grounds on which the Credit Ratings and/or Outlook are based. Following that review, the Credit Ratings and/or Outlook were not amended before being issued.

Regulatory disclosures
These Credit Ratings and/or Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and/or Outlook are UK-endorsed.
Lead analyst: Istvan Braun, Senior Representative
Person responsible for approval of the Credit Ratings: Sebastian Zank, Managing Director
The Credit Ratings/Outlook were first released by Scope Ratings on 27 February 2023. The Credit Ratings/Outlook were last updated on 23 October 2024.

Potential conflicts
See www.scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use/exclusion of liability
© 2025 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Ratings UK Limited, Scope Fund Analysis GmbH, Scope Innovation Lab GmbH and Scope ESG Analysis GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstraße 5, D-10785 Berlin. Public Ratings are generally accessible to the public. Subscription Ratings and Private Ratings are confidential and may not be shared with any unauthorised third party.