S&P raises Almaviva

S&P said it raised its ratings for Almaviva SpA and its senior secured notes to BB from BB-. The 3 recovery rating on the notes is unchanged.

“Almaviva's continued resilient performance in 2023 supports substantial deleveraging. We estimate that Almaviva posted about 8% revenue growth in 2023, driven by strong expansion in all business segments. In the IT services business, Almaviva signed around €658 million in new contracts in 2023, of which about 74% are with the public administration. As of fourth-quarter 2023, the company had secured an order backlog of €2.5 billion in revenue,” the agency said in a press release.

S&P said it forecasts Almaviva's free operating cash flow to debt to improve to above 30% in 2023, and remain above 15% thereafter.

“This improvement will be underpinned by solid top-line growth, adjusted EBITDA margin expansion, increased cash flow generation and prudent capital expenditure (capex) management. We anticipate Almaviva's S&P Global Ratings-adjusted EBITDA margin will improve to 15%-16% in 2024-2025, from about 14.5% in 2023,” the agency said.

The outlook is stable.

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