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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CONSUMER CYCLICALS
We are keeping an eye on HY consumer after yesterday's weakness. We hear Coty (Ba2 Pos/BB+ Pos/BBB-) sellers have been in the market including on the new 27s - a line we saw value in primary. It has been bid well in and we are skewed to see more value in Dufry (Ba2/BB+).
- Coty earnings were bit of non-event with firm FY (to June '25) guidance; LFL sales +6-8%, adj. EBITDA +9-11% on margin expansion of +10-30bps and FCF low to mid $400's (vs. $369m this year). Leverage targets unch; current 3.3x vs. exit this yr at 2.5x and next year at 2x. As we said most deleveraging will come from the continued sell-down in hair care co - Wella - whose value was reported unch (25.8% stake at $1.085b).
- Dufry (now called Avolta) is higher beta, exposed to travel and runs a similar HSD operating margin to both airlines and Coty. Guidance (to Dec) is firm; +5-7% growth and +20-40bps expansion in EBITDA margin (9% last yr). BS in check at net 2.35x vs. target 1.5-2x. Company has demonstrated (like Coty) strong governance on BS post recent M&A. Acquisitions has helped it double in size in under a decade while growing margins.
For reference Coty 27s were issued at +140 in May, +30 wide of Dufry. It is one of the best perfumers in consumer primary this year.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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