**Step 1 — Relevant industry**

VERBUND AG is primarily an electricity utility/power company, with revenue from electricity sales and grid revenue. Based on the provided methodologies, the closest fit is **Unregulated Power and Gas**, with some regulated utility characteristics due to grid operations. However, because most revenue is from electricity sales rather than grid revenue, I apply the **Unregulated Power and Gas** framework, while using the general S&P-style corporate ratio formulas supplied.

---

## Step 2 — Estimate 2021 Adjusted EBITDA

Baseline formula:

\[
\text{Adjusted EBITDA} = \text{reported EBITDA} + \text{lease adjustments} + \text{nonrecurring losses} - \text{nonrecurring gains} \pm \text{other adjustments}
\]

Given limited data on lease expense, pension deficit, guarantees, hybrids, and detailed nonrecurring classifications, I use reported EBITDA as the primary proxy.

2021 reported EBITDA:

\[
1{,}578{,}959{,}000
\]

**2021 Adjusted EBITDA ≈ €1,578.959 million**

---

## Step 3 — Estimate 2021 FFO

Baseline formula:

\[
\text{FFO} = \text{Adjusted EBITDA} - \text{cash interest} - \text{cash taxes}
\]

2021:
- Adjusted EBITDA = €1,578.959 million
- Interest paid = €17.900 million
- Income taxes paid = €238.200 million

\[
\text{FFO}_{2021} = 1{,}578.959 - 17.900 - 238.200
\]

\[
\text{FFO}_{2021} = 1{,}322.859 \text{ million}
\]

**2021 FFO ≈ €1,322.859 million**

---

## Step 4 — Estimate 2021 Adjusted Debt

Baseline formula:

\[
\text{Adjusted Debt} = \text{reported debt} + \text{leases} + \text{other debt-like items} - \text{eligible cash}
\]

For year-end 2021, use balance sheet at **2022-01-01**:
- Noncurrent financial liabilities = €1,834.155 million
- Current financial liabilities = €1,462.453 million
- Cash and cash equivalents = €318.562 million

Reported financial debt:

\[
1{,}834.155 + 1{,}462.453 = 3{,}296.608 \text{ million}
\]

Adjusted debt proxy:

\[
3{,}296.608 - 318.562 = 2{,}978.046 \text{ million}
\]

**2021 Adjusted Debt ≈ €2,978.046 million**

---

## Step 5 — 2021 Adjusted Debt / Adjusted EBITDA

\[
\frac{2{,}978.046}{1{,}578.959} = 1.886
\]

**2021 Adjusted Debt / Adjusted EBITDA ≈ 1.9x**

---

## Step 6 — 2021 FFO / Adjusted Debt

\[
\frac{1{,}322.859}{2{,}978.046} = 0.4442
\]

**2021 FFO / Adjusted Debt ≈ 44.4%**

---

## Step 7 — Estimate 2022 Adjusted EBITDA

2022 reported EBITDA:

\[
3{,}160{,}679{,}000
\]

Again, no clear basis to adjust for leases, pensions, nonrecurring items, or proportional JV EBITDA, so reported EBITDA is used as proxy.

**2022 Adjusted EBITDA ≈ €3,160.679 million**

---

## Step 8 — Estimate 2022 FFO

2022:
- Adjusted EBITDA = €3,160.679 million
- Interest paid = €36.100 million
- Income taxes paid = €343.100 million

\[
\text{FFO}_{2022} = 3{,}160.679 - 36.100 - 343.100
\]

\[
\text{FFO}_{2022} = 2{,}781.479 \text{ million}
\]

**2022 FFO ≈ €2,781.479 million**

---

## Step 9 — Estimate 2022 Adjusted Debt

For year-end 2022, use balance sheet at **2023-01-01**:
- Noncurrent financial liabilities = €2,844.559 million
- Current financial liabilities = €1,109.297 million
- Cash and cash equivalents = €409.252 million

Reported financial debt:

\[
2{,}844.559 + 1{,}109.297 = 3{,}953.856 \text{ million}
\]

Adjusted debt proxy:

\[
3{,}953.856 - 409.252 = 3{,}544.604 \text{ million}
\]

**2022 Adjusted Debt ≈ €3,544.604 million**

---

## Step 10 — 2022 Adjusted Debt / Adjusted EBITDA

\[
\frac{3{,}544.604}{3{,}160.679} = 1.1215
\]

**2022 Adjusted Debt / Adjusted EBITDA ≈ 1.1x**

---

## Step 11 — 2022 FFO / Adjusted Debt

\[
\frac{2{,}781.479}{3{,}544.604} = 0.7847
\]

**2022 FFO / Adjusted Debt ≈ 78.5%**

---

## Step 12 — Credit trend classification

### Signal 1: Leverage

\[
\Delta \text{Debt/EBITDA} = 1.1215 - 1.8860 = -0.7645x
\]

Threshold:
- ≤ -0.2x = Improving

The leverage ratio improved by about **0.76x**, well beyond the improving threshold.

**Signal 1 = Improving**

---

### Signal 2: Cash-flow coverage

\[
\Delta \text{FFO/Debt} = 0.7847 - 0.4442 = 0.3405
\]

Threshold:
- ≥ +0.03 = Improving

The FFO/debt ratio improved by about **34.1 percentage points**, far beyond the improving threshold.

**Signal 2 = Improving**

---

### Combined conclusion

Both leverage and cash-flow coverage improved materially. EBITDA nearly doubled, FFO more than doubled, and although adjusted debt increased, the earnings and cash-flow improvement more than offset the higher debt burden.

Therefore, the estimated S&P-style credit trend from 2021 to 2022 is:

<answer>Improving</answer>