Dec. 23 at 8:25 PM
Coty Inc. received a stable outlook from S&P Global Ratings after selling its remaining 25.8% stake in Wella and reducing debt. S&P affirmed Coty’s ’BB+’ rating, expecting leverage to fall to about 3x by the end of 2025, from 4.7x.
The company plans to use the
$750 million in Wella sale proceeds to address upcoming debt maturities, including 2028 bonds, with potential for further deleveraging from future Wella sale or IPO proceeds. In October, Coty issued
$900 million of bonds due 2031 to refinance and reduce near-term secured debt.
Coty is reviewing its consumer beauty business, which has been loss-making, though S&P sees value in the mass color cosmetics segment generating about
$1.2 billion in sales. Strategic options are also being considered for the Brazil business (~
$400 million in fiscal 2025 sales).
S&P expects Coty to generate about
$350 million in free operating cash flow in fiscal 2026, with adjusted EBITDA near
$1 billion.
$COTY