Avolta receives Moody’s upgraded credit rating to Ba2 with Stable Outlook
March 28, 2024 at 01:32 am EDT
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Avolta AG
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Avolta receives Moody’s upgraded credit rating to Ba2 with Stable Outlook
28.03.2024 / 06:30 CET/CEST
Avolta AG (SIX: AVOL), the leading global travel experience player, confirms its upgraded credit rating from Ba3 to Ba2 with Stable outlook according to Moody’s Investment Service announcement yesterday. The credit rating upgrade follows the successful closing of the business combination with Autogrill in 2023 as well as the company’s strong 2023 financial performance, the announcement of a balanced capital allocation policy and the solid trading environment in 2024.
In the rating report, published on March 27, 2024, Moody’s referred to Avolta’s continued strong organic revenue growth and improved profitability in 2023. According to Moody’s, the combination with Autogrill was credit-enhancing due to the increase in scale, product and channel diversification. Additionally, the combination has been financed mainly through shares.
Moody’s also highlighted the enhanced commercial competitiveness of Avolta, illustrated by the award of the 12-year concession in Spain in 2023 incorporating a 30% increase in floorspace as well as its product assortment.
“Ba2 rating reflects Avolta’s (i) leading position in travel retail and food and beverage, with broad geographic and product diversification, (ii) the long-term growth in air passenger traffic which supports demand, (iii) historically stable profitability and positive free cash flow generation, expected to continue, and (iv) a balanced financial policy, including a management-defined net leverage target of 1.5x-2.0x.” commented the agency.
Moody’s views Avolta’s liquidity as good, reflecting the company’s cash balance and credit facilities available at December 2023, and expects Avolta to retain ample headroom under its net leverage and interest cover covenants.
The stable outlook indicates Moody’s expectation of ongoing organic revenue and EBITDA growth, underpinned by steadily increasing air passenger traffic globally.
Yves Gerster, Avolta’s Chief Financial Officer, commented: “We are pleased about the rating upgrade we received from Moody’s this week, following the upgrade received last year. This represents further confirmation of the strong performance achieved in 2023 and the consistent outlook provided, while acknowledging the continued execution of the transformative business combination with Autogrill and our Destination 2027 strategy.”
Avolta AG, formerly Dufry AG is a Switzerland-based company engaged in the travel retail sector. The Company operates shops located at airports, cruise liners, seaports, railway stations and hotels. The Companyâs shops are categorized under five retail concepts: General Travel Retail Shops, which offer the full range of categories, such as perfumes & cosmetics, food & confectionery, wines & spirits, clothing & accessories, tobacco goods, souvenirs & electronics; Dufry Shopping, which provide travel retail duty-free shops; Brand Boutiques, which offer various boutiques of exclusive brands; Convenience Stores provide a wide assortment such as soft drinks, packaged food, travel accessories, electronics, personal items, souvenirs, newspapers, magazines and books and Specialized Stores offer products from a variety of different brands, belonging to one specific product category such as watches & jewelry, sunglasses, spirits and destination products.