NEWS/ANALYSIS: DUFRY RESULTS


Organic growth of 5.5% nudges Dufry over $4bn in first half


I


n the first half of this year, Dufry’s revenue rose by 7.2% year-on-year to reach CHF4,097.1m ($4.1bn),


with like-for-like growth contributing +3.5% to the result and new net concessions adding +2%. The travel retail juggernaut has moved to consolidate its multi-channel presence during the period, with 13,200sq m of new and expanded gross retail space across 109 shops, including operations on 12 cruise ships covering 3,500sq m over 38 stores, and refurbished concessions totalling 22,400sq m over 41 shops. In a results statement, Dufry


revealed it has secured agreements to open in new and existing locations totalling 14,100sq m in 2018/2019, with plans to revamp a further 33,000sq m this year as part of a wider 40,800sq m project pipeline. Among these contracts are


planned shop openings at the new Jazeera terminal at Kuwait Airport, 13 outlets at Chicago Midway International Airport and the new concession at Perth Airport. Investment in the firm’s Business


Operating Model (BOM) continues to yield results, catapulting EBITDA by 12.9% to a record CHF464.1m ($465.9m) as EBITDA margin grew by 50 basis points to 11.3%. Dufry confirms it is on track for a similar expansion for full-year 2018. BOM is being implemented


according to plan in Europe, Middle East and South America, says the Group; it has been launched in 39 countries, 14 of which are certified. Eastern Europe, Middle East, Asia


and Australia topped organic growth among the divisions, rising by 22.1% to CHF546.5m ($550.2m). The result was buoyed by growing Chinese passenger numbers, coupled with double-digit performances in the Middle East, Jordan, Kuwait, Bali, Cambodia, Indonesia, Macau and South Korea. Australia also delivered a healthy showing following renovations,


SEPTEMBER 2018


Record EBITDA gains of +12.9% to CHF464.1m ($465.9m) underpins the strides being made in its Business Operating Model. Luke Barras-Hill reports.


including Perth as mentioned above. North America turned in a


strong performance, with organic growth up 7.7% to CHF896.6m driven by a combination of solid passenger activity, productivity and strengthened duty paid and duty free retail concepts.


LATAM challenges In Latin America, organic growth of +4.2% owed much to sustained returns from Central America, Mexico and the Caribbean, alongside the Dominican Republic, Jamaica and Dufry’s cruise business. However, gains in Ecuador and Peru where offset by sales declines in Argentina, Brazil, Chile and Uruguay due to the devaluation of their respective currencies against the US dollar. Switzerland, Scandinavia and the


UK contributed towards organic growth of +3.3% (excluding the closing of Geneva) in a more stable performance from the UK and Central Europe region to CHF910.1m. Meanwhile, the gradual recovery of tourists to Turkey and Greece resulted in marginal organic gains of +0.5% to CHF833.1m in the Southern Europe and Africa zone.


The FX translation effect during the period was +1.7%, predominantly due to the strengthening of the Euro and the British Pound against the Swiss Franc. In Q2, the weakening of the Swiss Franc against other major currencies resulted in a positive FX effect (+3.5%) and at current rates the translational impact is forecast to be positive to year-end. “The first half year results were


solid and in line with Dufry’s expected targets for 2018,” said Julián Díaz, CEO of Dufry Group in a conference call during which the results were presented. “I am particularly pleased with


the EBITDA and cash generation for the period, a record for the first semester due to our good operational performance.” «


“I am particularly pleased with the EBITDA and cash generation for the period, a record for the first semester due to our good operational performance.”


Julián Díaz, CEO of Dufry Group


TRBUSINESS 17


Above: Dufry announced a seven-year agreement with Perth Airport in July.


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