Dufry's sales hit sharply by economic downturn but profitability holds up – 14/05/09
Source: ©The Moodie Report
By Matt Willey
INTERNATIONAL. Dufry’s turnover in the first three months of 2009 rose by +19.7% year-on-year, reaching CHF538.3 million (US$486 million). Sales were boosted by the impact of the Hudson Group acquisition (contributing +34%). But in organic terms, turnover was down -18.1%.
New concessions and the translation into Swiss Francs resulted in a positive effect of +3.8%.
EBITDA (before other operational result) grew by +15.8% to CHF58.1 million (US$52.4 million). The resulting EBITDA margin was 10.8%.
Dufry said that it had experienced a softening in turnover due to a fall in passenger numbers caused by the current economic environment, the effect of this year’s Easter holidays falling into the second quarter of 2009 compared to Q1 in 2008, plus various one-off effects.
On a regional basis, European business continued to feel the negative impact of Alitalia's de-hubbing at the Milan airports, which took place in the second quarter last year. Africa performed well and was able to maintain last year’s turnover level, Dufry said.
Eurasia saw a mixed picture, with some operations continuing to perform well and others being impacted by the current economic situation. Central America & Caribbean performed weakly, particularly in sales of watches & jewellery.
South America posted a single-digit decrease. This compensated for part of the organic fall in turnover through new operations that were opened in 2008, the retailer added.
"Dufry’s performance in the first quarter highlights the resilience of our business model in terms of profitability, the numbers demonstrate that it can operate successfully even in a challenging environment"
Chief Executive Officer
Gross profit margin (as a percentage of turnover) continued to increase to 55.4% in the first three months of 2009, 2.1 percentage points higher than the 53.3% in the corresponding quarter of 2008.
The efficiency plan, which was launched during the last quarter of 2008, positively impacted profitability and helped protect the margin across the group. It also had a positive effect on Dufry’s cash generation and net debt was reduced to CHF728.8 million (US$656.4 million) as per 31 March resulting in stable covenants, Dufry said.
Commenting on the results Dufry Group CEO Julián Díaz said: “In the first quarter of 2009, the accelerated decrease of passenger numbers combined with the one-off effects and the impact of Easter resulted in a strong decrease in organic growth. We will continue to closely monitor the development and take further actions if required as we have already done as part of our efficiency plan.
"Thanks to this, we have managed to maintain our profitability despite the current economic environment and the adverse conditions that have prevailed in the market.
”The integration of Hudson is on track and is well advanced on the operational level. The first synergies have started to materialise in terms of numbers. In this respect, the resilience of Hudson’s business proves a strong basis to drive the integration.
“Overall, Dufry’s performance in the first quarter highlights the resilience of our business model in terms of profitability and even though there is limited visibility on when the negative trend of passenger numbers will bottom out, Dufry’s first quarter numbers demonstrate that it can operate successfully even in a challenging environment,” Díaz added.
MORE STORIES ON DUFRY
Dufry South America sales surge +18% in 2008 - 06/04/09
'A good year for Dufry' - travel retail giant posts +9.5% rise in sales; EBITDA up by +13.2% - 03/04/09
Dufry reveals ambitious expansion plans for Hudson; speciality retailer to open 7,295sq m at North American airports – 03/04/09
Italy, Mexico and Caribbean prove Dufry’s most challenging markets in 2008, says Julián Díaz – 03/04/09