ION Platform - comment - model update

We expected the bonds to trade up on the back of the Q3 results. Growth remains strong, with revenue up 6% YTD and Q3 growth accelerating to 7%, broadly consistent with the rates seen in Q1/Q2. More importantly, the gap between Adjusted EBITDA and Pro Forma Adjusted EBITDA continues to close. The synergy programme is effectively complete, with $365m, or 102% of the $357m target, now actioned, while cash-realised synergies have increased to $165m / 46% of target from $121m / 34% at Q2. This is increasingly translating into reported EBITDA and stronger cash generation. 

The main negative is the lack of incremental debt repurchases in Q3, although approximately $250m of debt has been repurchased YTD.

Importantly for creditors, management has reiterated that it is “solely focused on addressing its maturities via repayment and/or pari-passu refinancing” and is not considering any priming, drop-down, non-pro-rata or coercive exchange, uptier, covenant-stripping or similar LME transaction. It also remains focused on opportunistically repurchasing debt in the open market.

We have updated the numbers in our model. Our projections were in line on Revenue, but €35m lower on Actual EBITDA as ION Platform have realised cost savings quicker than we expected. Our cashflow was €100m worse though as we expected a flat Working Capital in the quarter versus an actual outflow of €160m. We will update our view post the Q3 call tomorrow, but with bonds up 7pts from our opening position in June 2026, we may seek to take some profit off the table. However, we reiterate that we continue to see deleveraging into year-end, towards 6.5x on Actual EBITDA (no adjustments basis).