NEWS ROUND-UP Brazilian land border duty free breakthrough
Regulation has finally been approved to open land border duty free stores in Brazil, Dufry General Manager Brazil and Bolivia and ASUTIL President Gustavo Fagundes (pictured) confirmed during the recent Duty Free and Travel Retail Summit of the Americas in Orlando. This significant development follows the
submission and approval of a draft bill to the Brazilian government in 2012, but delays
have hampered progress. As reported in the March edition
of TRBusiness, customs have already laid out guidelines for the regulation of Brazil’s long-awaited land border shops business. This took place at a meeting of key South American duty free stakeholders convened by the National Union of State Legislators in the presence of the Receita Federal (Brazil’s federal revenue service). Under the now approved guidelines,
border stores can be established in any of the 32 border twin cities in either special areas or sites determined by each city. These include Colombia, Venezuela, Argentina, Paraguay, Bolivia and Peru. Contrary to speculation that the new
duty free stores could expect to begin trading in August, José Luis Donagaray, Secretary General, ASUTIL had previously told TRBusiness that such a scenario would be more likely to occur by the end of 2018. Fagundes said: “This is a very important change from an industry point of view. It opens several opportunities for operators and suppliers.
“We have been working for a long time to
get this act to be issued and believe it will represent an important learning curve for everyone.” On the subject of inbound DF
allowances in LATAM countries – quotas have recently increased in Argentina and Uruguay – Fagundes added: “This is key for the sustainability of duty free and an issue the industry has worked hard on.”
Dufry turnover +7% to $8.8bn in a fruitful 2017
The Dufry Group has announced revenue growth of +7% to CHF8,377.4m ($8.8bn) in a strong full-year 2017 performance, as synergies from its World Duty Free acquisition bore significant results. Organic activity increased by 7.4%
as EBITDA broke the CHF1bn mark (CHF1,007.1m) in a year denoted by new contract gains and extensions and an increase in its gross retail concession space to 30,000sq m. In a statement, Dufry confirms North
and Latin America as accounting for the largest share of that space, followed by Asia, Middle East, Australia, Southern Europe and Africa, with deals inked in 2018 and 2019 to increase that footprint by a further 15,500sq m.
Synergies from the World Duty Free
acquisition totalled CHF125m ($132m), ‘considerably exceeding the original estimates of CHF105m’. EBITA margin increased to 12%, versus
11.9% in 2016, Gross profit shot up by 8.6% to CHF4,978.6m ($5.3bn) while net debt reduced to CHF3,686.9m ($3.9m) as of 31 December. Organic sales from Dufry’s UK, Central
and Eastern Europe segment outpaced other regions, increasing by 6.3% to CHF2,147.4m ($2.3bn), as the UK seized on positive momentum due to the British Pound’s devaluation following the country’s Brexit decision in June of 2016. “In 2017, Dufry achieved a strong performance and we have delivered
good results in all our divisions,” stated Dufry Group CEO Julián Díaz. “We have made good progress in the three defined key areas: accelerating organic growth, increasing cash generation and reducing our debt. We have also achieved our goal to fully reflect the CHF125m of WDF synergies, 20% higher than originally announced.”
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