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.”