Evoca SpA

Overview Key strengths Key risks Leading position as a manufacturer of professional coffee machines, mainly in Europe. Concentration in out-of-home coffee machines and generates no sales in the fast-growing home coffee machine segment. Flexible cost structure contained the erosion of profitability during the pandemic. The changes triggered by the pandemic have affected the consumption of coffee in out-of-home locations. Well-diversified brand portfolio covering multiple price points and exposure to highly profitable and less-cyclical spare and accessories segment. Slow recovery of sales toward pre-pandemic level expected toward mid-2023. Long tenure of debt maturing in 2026 and comfortable liquidity position Highly leveraged capital structure with estimated leverage close to 18x at the end of 2021, including payment in kind (PIK) notes. .

...S&P Global Ratings expects an increase in sale prices from the fourth quarter 2021 to offset the hike in the cost of raw materials. Evoca's profitability has suffered from the rising price of materials such as plastic, steel components, and electronics since the third quarter 2021. According to management, the increased cost eroded Evoca's EBITDA margin by 120 basis points from 19.4% over...

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