TOP 10 OPERATORS 1: DUFRY GROUP


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Dufry banks on Brazil as storm appears to clear in South America


While Dufry’s growth continues to moderate following consecutive years of industry- changing acquisitions – namely Nuance and WDF – the world’s leading travel retailer still had big announcements to make this year regarding its operations in Russia and Brazil. Charlotte Turner reports.


ast year will be remembered as another challenging one for Dufry in South America, but


despite the volatile conditions and drop in sales for operations across the region, group-wide turnover grew by 3.7% to total CHF8.7bn (US$8.9bn), with organic growth nudging up 2.7% (like-for-like growth +1%; net new concession gains +1.7%). Dufry’s 2018 (calendar year)


financial results were accompanied by this statement on its outlook for 2019: “Based on current indications of our trading in 2019, we anticipate a continued gradual improvement in organic growth along the year. “In the first two months of 2019,


total growth was above +3%. The growth improvement in early 2019 is mainly due to the contribution of new concessions.” It appeared that Dufry’s prediction


was accurate when it released its H1 2019 results on 30 July this year, stating that organic growth had indeed continued to accelerate in the first and second quarters, supported by improvements in various trading


OCTOBER 2019


environments compared with this time last year. According to the company’s CEO,


Julián Díaz, cash flow this year has continued to develop strongly ‘as expected’ and is in line with Dufry’s yearly target. Dufry’s turnover grew by 2% in H1 2019, reaching CHF4.18bn (US$4.22bn). Organic growth contributed +2.2%. Excluding South America, organic growth was even more impressive at +5.4%.


Financial reporting changes The company was keen to highlight that its like-for-like performance considerably improved in the first half of this year, leading Dufry to confidently confirm its mid-term organic growth target of +3-4%. However, this year the company


faced additional complexities as it began to report its financial obligations under the new IFRS 16* framework, which it says mainly concerns the way leases are declared. Previously, leases were accounted as expenses, but fixed components are now capitalised and amortised over


the lifetime of contracts. “Going through our profit and loss


(P&L) KPIs, our adjusted operating profit reached CHF237m in the first semester 2019, while adjusted net profit amounted to CHF72.8m… our P&L is now very much impacted by IFRS 16, and that’s hardly comparable to the previous year,” said Díaz in Dufry AG’s Q2 2019 results/earnings call with analysts and members of the media. “For this reason, I prefer to look at


the cash flow metrics. In the first half year 2019, our adjusted operating free cash flow reached CHF409m. Equity-free cash flow came in at CHF140.4m, which is in line with our target for the year between


Dufry’s turnover grew by 2% in H1 2019, reaching CHF4.18bn. Organic growth contributed +2.2%. Excluding South America, organic growth was even more impressive at +5.4%.


TRBusiness TOP 10 OPERATORS 9


Above: Dufry opened its first Brazilian border duty free store in August.


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