# Reasoning for S&P's Adjusted Leverage Trend (2022)

## Step 1: Calculate Net Debt for Both Years

**2023-01-01 (End of 2022):**
- Long-term Borrowings: €19,006M
- Short-term Borrowings: €709M
- Current Bank Overdrafts: €0M
- Cash and Cash Equivalents: €6,547M
- Total Debt: €19,715M
- Net Debt = €19,715M - €6,547M = **€13,168M**

**2022-01-01 (End of 2021):**
- Long-term Borrowings: €12,366M
- Short-term Borrowings: €1,339M
- Current Bank Overdrafts: €64M
- Cash and Cash Equivalents: €3,204M
- Total Debt: €13,769M
- Net Debt = €13,769M - €3,204M = **€10,565M**

## Step 2: Calculate EBITDA for Both Years

**2022 (Year ended 2023-01-01):**
- Operating Loss: €(976)M
- Add: Depreciation and Amortization: €1,233M
- Add: Other Adjustments (Provisions, non-cash items): €104M + €1,347M = €1,451M
- EBITDA = €(976)M + €1,233M + €1,451M = **€1,708M**

**2021 (Year ended 2022-01-01):**
- Operating Loss: €(275)M
- Add: Depreciation and Amortization: €1,165M
- Add: Other Adjustments (Provisions, non-cash items): €(59)M + €1,101M = €1,042M
- EBITDA = €(275)M + €1,165M + €1,042M = **€1,932M**

## Step 3: Calculate Net Debt / EBITDA Ratio

**2022 (End of 2022):**
- Net Debt / EBITDA = €13,168M / €1,708M = **7.71x**

**2021 (End of 2021):**
- Net Debt / EBITDA = €10,565M / €1,932M = **5.47x**

## Step 4: Calculate Year-on-Year Change

Gap = 7.71x - 5.47x = **2.24x**

## Step 5: Compare Against Stability Threshold

According to the definition:
- **Stable**: Gap is within ±0.3x
- **Improving**: Gap is lower than 0.3x
- **Deteriorating**: Gap is higher than 0.3x

The gap of 2.24x significantly exceeds the 0.3x threshold, indicating a substantial deterioration in the leverage ratio year-on-year. This is driven by:
- Higher net debt (€13.2B vs €10.6B, +24.6%)
- Lower EBITDA (€1.71B vs €1.93B, -11.6%)

Both factors contribute to a significant leverage deterioration.

<answer>Deteriorating</answer>