S&P Global Ratings - Mahle GmbH Outlook Revised To Positive On Improving Profitability And Deleveraging

We anticipate Mahle GmbH’s restructuring actions will translate into additional profitability improvements in 2026 and 2027 despite declining auto production and higher cost inflation in its key end markets. We estimate the group’s S&P Global Ratings-adjusted EBITDA margin will increase to 8.5%-9.0% in 2027, from 8.1% in 2026 and 8.0% in 2025, supporting a gradual improvement in leverage metrics.
Controlled capital expenditure (capex) and lower tax expense following the group’s recent reorganization should also support robust free operating cash flow (FOCF) of at least €200 million by 2027, after elevated cash restructuring outlays in 2026.
We therefore revised our outlook on Mahle to positive from stable and affirmed our ‘BB-‘ longterm issuer credit rating on the group and issue ratings on its unsecured debt.
The positive outlook indicates that we could raise our rating on Mahle over the next 12 months if we anticipate adjusted funds from operations (FFO) to debt and FOCF to debt will increase above 25% and 5%, respectively, in 2027 supported by adjusted EBITDA margins staying sustainably above 8%.