Adevinta repays €120 million debt in Q2, aims for 2x leverage ratio

By Devika Patel

Knoxville, Tenn., Aug. 31 – Adevinta ASA plans to get its net debt to EBITDA leverage ratio down to 2x in the medium-term and, towards that end, repaid €120 million of debt recently.

“We continued to deleverage the business at the end of the quarter,” chief financial officer Uvashni Raman said on the company’s second quarter ended June 30 earnings conference call on Thursday.

“We have already reached our year-end target for 2023 and we intend to move towards 2x net debt to EBITDA in the medium term.

“In the quarter, we managed to repay an impressive €120 million of debt, of which €100 million was for our term loan B, U.S. dollar denominated, and €20 million was for the term loan B in euro.

“This is in accordance with our financial policy and associated leverage targets and in line with the strategy to prioritize floating debt.

“We will continue to focus on deleveraging and further optimize our debt structure to mitigate the impact of rising interest rates.

“Our continued deleveraging has improved our debt profile as evidenced by the recent credit upgrades with Fitch and Moody’s,” Raman said.

There are no debt maturities until 2025.

“Looking now at our debt maturity profile, we also have some ways to go before the maturity of our debt as we do not have to repay debt before 2025,” Raman said.

The company is focused on paying down its floating-rate debt first.

“Regarding interest rates, we continue to reduce our floating interest rate exposure by prioritizing floating debt when it comes to deleveraging,” Raman said.

“Our floating debt to total debt ratio is now at 30%.

“With this deleveraging strategy, our interest expense was roughly flat in the first quarter of the year despite rapid increases of reference rates,” Raman said.

The company reported strong cash generation in the quarter, which enabled the debt repayments.

“Overall, we delivered, once again, a strong financial performance with 14% revenue growth for our core markets,” chief executive officer Antoine Jouteau said on the call.

“EBITDA margin was very strong at 38%, up three percentage points year-on-year.

“This has resulted in strong cash generation, allowing us to further deleverage the business and to pay down debt again this quarter, mitigating some of the impact of rising interest rates,” Jouteau said.

Adevinta is an Oslo-based online classifieds company.

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