INEOS : Update post Q4 results, new cycle scenarios and estimated recovery rates

After the publication of the Q4 2025 results at the end of February 2026, we have updated our forecast for FY 2026. Significant capacity additions will continue in some segments throughout the year, albeit others will benefit from a heavy TAR season expected, notably in Europe. While we anticipate negative FCF for both actors in 2026, liquidity positions are sufficient to cover debt repayments and FCF outflows until at least 2027.
On a more structural tone, we revised the EBITDA through the cycles for both entities to reflect the new market conditions, while estimating their FCF generation capabilities under those scenarios. We also modelled different recovery scenarios to assess the debtholders’ and shareholders’ interest in supporting the next refinancing transactions, even assuming a delay in P1.
All in all, FY 2026 will be marked by continued geopolitical volatility which, if maintained for a long period of time, could prove to be positive for the INEOS Universe. Regulatory changes are also in sight in both Europe and China.
Despite difficult market conditions, the real challenge for both companies will take place in 2027 (IGH) and 2028 (IQ) when their access to capital markets will be tested.