Scope Ratings GmbH (Scope) monitors and reviews its credit ratings on an ongoing basis and at least annually, or every six months in the cases of sovereigns, sub-sovereigns and supranational organisations that may act as a lender of last resort.

Scope performs monitoring reviews to determine whether material changes and/or changes in macro-economic or financial-market conditions could have an impact on the credit ratings. Scope considers all available and relevant information when undertaking the monitoring review.

Monitoring reviews are conducted by performing a peer comparison, benchmarking against the rating-change drivers, and/or reviewing the credit rating’s performance over time, as deemed appropriate by the Lead Analyst or Analytical Team Head, in addition to an assessment of all aspects of the relevant methodology/ies, including key rating assumptions and model(s). Scope announces the result of each monitoring review on its website and/or on its subscription platform ScopeOne.

Scope completed the monitoring review for Otthon Centrum Holding Kft. (Issuer rating BB-/Stable; senior unsecured debt rating: BB-) on 17 October 2025.

This monitoring note does not constitute a credit-rating action, nor does it indicate the likelihood that Scope will conduct a credit-rating action in the short term. Information about the latest credit-rating action connected with this monitoring note along with the associated ratings history can be found on scoperatings.com.

Key rating factors

The issuer rating reflects a solid financial risk profile (assessed at BB+), with leverage (Scope-adjusted debt/EBITDA*) between 1x and 2x, historically supported by large cash availability. The rating also reflects Otthon Centrum’s leading position in the Hungarian market, but it is constrained by the issuer’s small size, and the concentration in one country, which leads to high cash flow volatility.

Otthon Centrum business risk profile (assessed at B+) continues to be supported by the leading position, together with Duna House (BB-/Stable) as a broker of real estate and financial services in Hungary, supplemented with the recent expansion in Poland. While the onboarding of the Polish branches will lead to higher cost allocation in 2025–2026, the issuer’s topline continues to grow, supported by favorable market dynamics in Central Europe. In H1 2025, revenue increased by 20% YoY to HUF 4.5bn, reflecting this positive trend. However, the company’s relatively small size (HUF 8.2bn [EUR 21m] revenue in 2024) remains a limiting factor in the rating assessment, as it constrains the company ability to diversify beyond its domestic market and its current product offers. The Polish expansion is expected to contribute meaningfully only over the longer term. The weak diversification, as a consequence, exposes the issuer to high sensitivity to macroeconomic trends and interest rate fluctuations. That said, the issuer is taking steps to improve business resilience by increasing its share of recurring revenue, particularly through insurance and maintenance service offerings.

Profitability as measured by EBITDA margin is slightly volatile but remains in line with Scope’s rating case. It is anticipated to range between 11% and 15% in 2025-2027 (LTM to end-June 2025: 13.6%).

The financial risk profile (assessed at BB+) is characterised by the moderate leverage and a strong cash position. Leverage, as measured by debt/EBITDA, remained stable at 1.7x in 2024 (LTM to end-June 2025: 1.7x) and Scope projects the ratio to remain broadly in line with the rating case. Scope assumption includes no significant debt issuance.

While the issuer benefitted from a net interest position until 2024, interest income is anticipated to decline. However, EBITDA interest cover is projected to remain at a comfortable level of above 10x, due to over 90% of debt being fixed rate and at a comparatively low rate in today’s environment.

The free operating cash flow/debt, returning positive in 2024, at 56%, after being -2% in 2023, is very volatile. Scope notes that the ratio oscillated between -32% and 69% over the 2020–2024 period and continues to expect substantial variability. This volatility underscores the issuer’s relatively small scale and limited financial flexibility, which can amplify the impact of operational or market disruptions on cash flow generation.

Liquidity is adequate. The HUF 2.9bn bond started amortizing in 2024 (5% pa in 2024-2027, 10% in 2028-2030 and 50% in 2031). The other debt repayments are negligible.

Supplementary rating drivers are credit neutral.

The Outlook is Stable, reflecting Scope's expectation that the transition of BXI from an owned business to a franchise will not have a material impact on credit metrics. This reflects Scope's understanding that BXI's EBITDA contribution was marginal and that outsourcing the business allows effort and resources to be allocated to more profitable businesses, while maintaining a strong presence in the Budapest area. As a result, Scope expects the leverage ratio (debt/EBITDA) to remain between 1x and 2x.

The upside scenario for the rating and Outlook is seen as remote, but would require:

• Otthon Centrum to significantly increase its size and diversification while maintaining financial metrics in line with Scope's expectations, i.e. a Debt/EBITDA below 2x for a sustained period.

The downside scenario for the rating and Outlook is:

• Financial leverage (debt/EBITDA) were to rise significantly above 3.0x on a sustained basis. This could be caused by margin pressure due to increased competition from banks, online retailers or other larger organisations with greater financial strength, adverse regulatory developments or challenges in integrating acquired businesses.

*All credit metrics refer to Scope-adjusted figures.

The methodologies applicable for the reviewed ratings and/or rating Outlook (General Corporate Rating Methodology, 14 February 2025; European Business and Consumer Services Rating Methodology, 15 January 2025) are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Claudia Aquino, Associate Director

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