S&P rates La Doria, notes B

S&P said it assigned B ratings to La Doria SpA and its planned €500 million of senior secured floating-rate notes due 2029 with a 3 recovery rating (55% recovery prospects). As part of the transaction, the group will issue an unrated €85 million super-senior revolving credit facility, which is expected to stay undrawn and will support the group's liquidity. The outlook is stable.

La Doria will use the proceeds to fully refinance its €346 million bank debt due 2028-2029, fund a €125 million one-off dividend payment to its shareholders, cover transaction costs, and maintain some additional cash on the balance sheet.

“La Doria's focus on the private label segment (96% of sales in 2023) supports its growth as consumers are making more price-conscious choices in the current macroeconomic environment. At end-2023 it posted revenue of €1.24 billion, up about 20% year-on-year, supported by a 19% price increase to compensate for higher input costs. We evaluate positively the group's resilient volume performance, growing about 1.5% year-on-year. This solid operating performance comes after robust revenue growth in 2022 of about 17% that was supported by an 11% price increase and a 6% volume expansion,” the agency said in a press release.

S&P added, “The stable outlook reflects our view that the group's operating performance in 2024-2025 should be resilient, with healthy and recurring annual free operating cash flow (FOCF) of at least €25 million-€30 million, and S&P Global Ratings-adjusted debt to EBITDA below 5x.”

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