Chobani Global Holdings LLC

The stable outlook reflects our expectation that operating performance will continue to slowly improve and capex will moderate over the next 12 to 18 months, leading to positive free operating cash flow in fiscal 2021. Although we expect debt to EBITDA to be above 7x (above 10x including the preferred equity debt adjustment) for the next 12 months, we expect modest EBITDA growth will slowly lead to lower leverage and better debt service capacity. A combination of new product innovation and market share gains in core categories from better marketing execution, coupled with continued cost savings that largely offset input cost inflation and ongoing marketing spending, will lead to EBITDA cash interest coverage around 2x; albeit with still high debt

...Because of fallout from the COVID-19 pandemic, we expect Chobani's revenues to increase modestly as retail volumes remain robust but food service demand remains depressed. We believe Chobani remains well positioned under the COVID-related circumstances because consumers are eating and cooking more at home. However, the decline in cream and sales of yogurt products to the food service segment (together about 10% to 15% of revenues), with higher operating costs will continue to offset volume gains in retail for the second half of the year. We expect a modest EBITDA decline in 2020 primarily from mix shift to larger product sizes and higher costs such as labor, COVID-related safety expenses, and higher marketing expenditures in the second half of 2020, offset by higher capacity utilization and lower milk prices in the second half of the year. We expect EBITDA improvements in 2021 primarily from recovery of food service volumes, ongoing retail demand, contribution from new products, lower milk...

Full Report