Research Update: Evoca S.p.A. Outlook Revised To Negative From Stable On Slowdown In Demand; 'B' Ratings Affirmed

We expect containment measures and social distancing to impair out-of-home coffee consumption and affect demand for professional coffee machines. We project Evoca S.p.A.'s leverage to materially increase above 10x in the next 12 months, and funds from operations (FFO) cash interest to approach 2.0x. However, in our view, it will not face material liquidity deterioration in the next 12 months thanks to ample cash availability. We are revising our outlook to negative from stable and affirming our 'B' long-term issuer credit and senior secured debt ratings on Evoca. The negative outlook reflects our view that we can downgrade the rating in the next 6-12 months if we have evidence that the company's leverage will stay above 10x for a prolonged

...- We expect containment measures and social distancing to impair out-of-home coffee consumption and affect demand for professional coffee machines. - We project Evoca S.p.A.'s leverage to materially increase above 10x in the next 12 months, and funds from operations (FFO) cash interest to approach 2.0x. - However, in our view, it will not face material liquidity deterioration in the next 12 months thanks to ample cash availability. - We are revising our outlook to negative from stable and affirming our 'B' long-term issuer credit and senior secured debt ratings on Evoca. - The negative outlook reflects our view that we can downgrade the rating in the next 6-12 months if we have evidence that the company's leverage will stay above 10x for a prolonged period and FFO cash interests reduces below 2x meaning that free operating cash flow (FOCF) cushion materially declined....

Research Update