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Rating action

Scope Ratings GmbH (Scope) has today affirmed the CCC/Stable issuer rating of Masterplast Nyrt. Concurrently, Scope has affirmed the CCC rating of the issuer’s senior unsecured debt category.

The rating affirmation incorporates the correction of errors made in the calculation of Scope-adjusted EBITDA*, funds from operations and free operating cash flow. Scope reviewed the ratings and concluded that the corrections of those calculation errors had no impact on the ratings.

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). Masterplast’s business risk profile is constrained by its small size and limited geographic diversification. This makes it vulnerable to regional economic fluctuations and restricts its ability to achieve economies of scale. Although Masterplast has an established niche position in insulation systems in Eastern Europe, supported by localised production and strategic partnerships, these structural limitations continue to cap Scope’s assessment.

However, profitability prospects have improved, with sales and EBITDA expected to reach around EUR 170m and EUR 10m respectively in 2025. This is driven by a top-line recovery and HEM (certified energy savings) trading. The issuer benefits from a first-mover advantage in the latter, which has created a new revenue stream that supports profitability and offers medium-term upside for cash flow generation, backed by a HUF 18bn (approx. EUR 45m) framework contract with MVN Zrt.¹ (ESG factor: credit-positive). However, EBITDA margins remain modest at 5% (year to end-September 2025) compared to industry leaders. Growth depends on sustained demand and policy tailwinds, such as EU energy-efficiency targets and Hungary’s renovation programmes. Although customer diversification is a strength, geographic concentration and limited segment breadth – following the exit from the healthcare sector and slow progress in the modular homes segment – underscore the need for either further market share gains or a substantial improvement in profitability in order to support a stronger business risk profile.

Financial risk profile: CCC (unchanged). Masterplast's financial risk profile continues to reflect persistently inadequate liquidity and, despite ongoing improvements, weak credit metrics.

Break-even free operating cash flow, which Scope expects through at least 2027, is limiting organic deleveraging and keeping the company reliant on external funding. While a policy-driven demand recovery and HEM certificate sales offer medium-term upside, execution risks and the slow pace of structural improvement are keeping cash flow cover under pressure.

Leverage has improved following the EBITDA recovery and a EUR 15m equity injection², reducing debt/EBITDA to 17x (LTM to end-September 2025) from 36x in 2024, with further improvement to 6–8x forecast by 2026. However, leverage remains well above pre-2023 levels, and deleveraging is constrained by break-even cash flow.

Interest coverage is trending upward and is expected to exceed 2.0x in 2025 (LTM to end-September 2025: 2.0x). At the same time, refinancing risk and rising funding costs – driven by an expected shift to floating-rate debt (market standard) – limit sustainability.

Overall, credit metrics remain vulnerable to delays in demand recovery and higher financing costs.

Liquidity: inadequate; -1 notch (unchanged). Liquidity remains inadequate, with internal cash flow unable to cover short-term obligations. This leaves Masterplast reliant on refinancing and asset sales. Despite a EUR 15m equity injection and temporary relief from new bank facilities, liquidity remains under pressure from break-even free operating cash flow (expected by Scope until 2027) and the need for recurring refinancing amid macro fragility. However, given the issuer’s track record of continued bank support, Scope expects it to successfully address any short-term refinancing issues, including rolling over overdrafts and refinancing the EUR 10m working capital loan with Raiffeisen in December 2025. Bond amortisation in December 2025 will likely be covered by available cash (EUR 13m at the end of September 2025).

While Masterplast’s good track record with regard to bank support mitigates near-term risk, it does not alter the company's structural dependence on external funding until a broad-scale recovery in demand becomes apparent.

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

One or more key drivers of the credit rating action are considered an ESG factor.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s expectation that Masterplast’s operations will stabilise, helping to improve credit metrics and address immediate negative rating pressure from weak liquidity. The Outlook also reflects moderate top-line growth of 4% annually between 2026 and 2027, with unchanged EBITDA margins of around 5%. This supports above-par interest coverage and debt/EBITDA of between 6-8x. The Outlook further incorporates Scope’s expectation that maturing bank debt will be successfully rolled over or refinanced, based on the issuer’s historical track record and recovering operations.

The upside scenario for the ratings and Outlook is:

• Improved liquidity situation, with less reliance on short-term facilities being rolled over annually, and the capacity to manage bond amortisations ahead of schedule.

The downside scenario for the ratings and Outlook is:

• Unfavourable business developments that threaten banks' willingness to refinance and put additional strain on the company’s liquidity position.

Debt rating

Scope’s recovery analysis assumes a hypothetical default in 2026 under a liquidation scenario. The analysis factors in EUR 37.4m of senior secured bank debt (with overdrafts fully drawn) and EUR 34.5m of senior unsecured debt. The recovery prospects for senior unsecured creditors are considered 'average', which results in the senior unsecured debt category rating of CCC in line with that of the issuer. This mainly reflects the company's limited capacity to reduce its debt.

Environmental, social and governance (ESG) factors

Masterplast’s cash generation prospects are supported by its first-mover advantage in Hungary’s certified energy savings (HEM) market. This position is reinforced by a 10-year contract worth HUF 18bn with MVM, with the majority of revenues expected over the next three to four years. Additional HEM sales of around 300,000 GJ per year through exchanges or direct transactions, alongside government-backed insulation programmes and efficiency gains from related product sales, will provide further revenue streams. The company’s early entry into HEM trading enhances its profitability and creates a medium-term opportunity for increased free cash flow, driven by demand for ESG-related products.

All rating actions and rated entities

Masterplast Nyrt.

Issuer rating: CCC/Stable, affirmation

Senior unsecured debt rating: CCC, affirmation

*All credit metrics refer to Scope-adjusted figures.

Rating driver references
1. 22 September 2025 Company news 
2. 4 March 2025 Company news

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; Construction and Construction Materials Rating Methodology, 24 January 2025), 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 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 scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at 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 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: Philipp Wass, Managing Director
Person responsible for approval of the Credit Ratings: Karl Yuan Pettersen, Managing Director
The Credit Ratings/Outlook were first released by Scope Ratings on 9 September 2019. The Credit Ratings/Outlook were last updated on 18 December 2024.

Potential conflicts
See 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
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