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Rating action

Scope Ratings GmbH (Scope) has today assigned a final rating to Elixir Group d.o.o.’s (‘Elixir’) RSD 4.1bn senior unsecured green bond at BB+, while the preliminary bond rating was withdrawn at (P) BB+. No action has been taken on the BB/Stable issuer rating.

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

Key rating drivers

Debt rating

Elixir has successfully tapped the bond market with a first-time senior unsecured green bond issue (RSD 4.1bn) in Q2 2025. The bond ranks below the company’s substantial amount of secured debt (e.g. bank loans) which is secured by tangible assets such as subsidiary shares, a mortgage on financed assets, and receivables. Scope bases its recovery analysis for the senior unsecured green bond on Elixir’s significant asset base, where property, plant, equipment, inventories, and receivables constitute over 90% of the total balance sheet. These assets support above-average recovery expectations for the senior unsecured debt, even when creditors that hold senior secured debt would have been settled in full in a theoretical default scenario.

The projected liquidation value of about RSD 49bn at YE 2026 is expected to largely cover creditors’ claims of about RSD 46bn, including taxes and payables. While the recovery rate for the senior unsecured bond is estimated at an excellent level, the upnotching of one notch on the issuer rating reflects constraints due to its unsecured nature and the potential increase in senior secured debt on the way to a default as well as the high price volatility for core products which can significantly impact the value of inventories and the value of claims at default. Consequently, the debt rating is limited to BB+.

Issuer rating

Elixir’s BB/Stable issuer rating remains unchanged, based on a BB assessment for its business risk profile, a BB assessment for its financial risk profile and a zero-notch impact stemming from supplementary rating drivers.

The issuer rating is supported by the company’s established niche in phosphate-based fertilisers and phosphoric acid, its leading position in the Serbian market, and its moderate-to-good profitability. The company’s ability to self-procure key inputs, export reach to over 80 countries, and the gradual shift toward higher-margin products enhance its resilience. Planned investments in technical-grade phosphates and phosphoric acids are set to broaden diversification and strengthen the margin profile, i.e. leading to a Scope-adjusted EBITDA margin* of around 17.5% in 2026 from 15.6% in 2024. Moreover, the rating benefits from moderate leverage (projected debt/EBITDA of 2.6x–3.3x in 2025–2026, after 3.3x in 2024), adequate debt protection (EBITDA interest cover projected expected at 5.6x–7.2x, after 4.4x in 2024), adequate liquidity and supportive financial policies. Leverage targets and loan covenants act as internal discipline mechanisms.

However, the issuer rating is constrained by the chemical industry’s inherent input/output price volatility, Elixir’s comparatively small scale, and limited product diversification, with a continuing concentration on the domestic market. Moreover, the company’s ongoing capex and working capital needs are placing pressure on free operating cash flow, resulting in a continued reliance on external funding. While the company’s ongoing investment programme will likely translate into improved scale, cash flow resilience, and profitability, it will weigh on credit metrics for the at least for the next two years. Scope expects sustained positive free operating cash flow only from 2027 onward.

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

Outlook and rating sensitivities

The Stable Outlook incorporates Scope’s expectations about a smooth execution of the ongoing investment projects and ramp-up of production capacity, which will likely result in a gradual improvement of the EBITDA margin to more than 16% in 2026. This supports Scope's projection that the company will keep its leverage (debt/EBITDA) below 3.5x and its interest coverage (EBITDA/interest) above 4.0x.

The upside scenarios for the ratings and Outlook are (collectively):

1. Improving business risk profile, e.g. by consolidating the EBITDA margin above 20% and improving diversification, a scenario considered remote at present
    
2. Improving financial risk profile, as demonstrated by a leverage ratio (debt/EBITDA) of 2.5x or lower and a cash flow cover (free operating cash flow/debt) of around or above 5% on a sustained basis

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

1. Deteriorating financial risk profile as evidenced by leverage (debt/EBITDA) persistently above 3.5x or prolonged period of negative free operating cash flow beyond 2026
    
2. Deteriorating business risk profile as a result of group margin not improving to above 15% over the medium term

All rating actions and rated entities

Elixir Group d.o.o.

Issuer rating: BB/Stable, No Action

Preliminary senior unsecured RSD 4.1bn bond rating: (P) BB+, Withdrawal

Senior unsecured RSD 4.1bn bond rating (ISIN: RSELIXD32646): BB+, New

*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*; Chemicals Rating Methodology, 16 April 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.
*Editorial note: On 23 May 2025, we amended the methodology date. In the original publication the date was 16 October 2023.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
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: Sebastian Zank, Managing Director
Person responsible for approval of the Credit Ratings: Philipp Wass, Managing Director
The Credit Ratings/Outlook were first released by Scope Ratings on 29 January 2025.

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.