Basel, November 5, 2012
Dufry increases turnover by 25.8% and generates record EBITDA margin of 15.2%
in the first nine months of 2012
In the first nine months of 2012, Dufry's turnover grew by 25.8% to CHF
2,363.9 million and gross margin increased by 80 basis points to 58.8% in the
period. EBITDA increased by 40.5% to CHF 360.2 million and EBITDA margin
improved by 160 basis points, reaching a record of 15.2%.
Strong turnover growth and further improvement of gross margin and EBITDA
Turnover reached CHF 2,363.9 million in the first nine months of 2012 versus
CHF 1,879.0 million one year earlier a growth of 25.8%. Organic growth was
4.9%, to which like-for-like growth contributed 2.5% and new concessions and
expansions added 2.4%. Acquisitions contributed 14.9% to turnover growth and
changes in foreign exchange rates resulted in a positive translation effect of
Dufry increased its gross margin once more by 80 basis points to 58.8% in the
first nine months of 2012. At the same time, EBITDA margin improved by 160
basis points to 15.2% - a new record for the Company. The EBITDA margin
improvement was supported by Dufry´s cost control as well as synergies from
the acquired businesses. In absolute terms, EBITDA for the nine month period
of 2012 reached CHF 360.2 million, a growth of 40.5% compared to the same
period in 2011.
Global trend remain intact, regional differences persist
In June 2012, Dufry announced an internal reorganization aiming to continue
delivering sustainable long term growth and shareholder value creation. The
re-shaping of the regional structures from six to four regions is designed to
allocate increased responsibilities to the regions and to have greater
flexibility to execute and implement the global strategy. At the same time,
Dufry also centralized group functions where economies of scale can be
achieved, such as procurement and logistics. The organizational changes were
fully implemented as of 1st September, 2012.
Turnover of Region EMEA & Asia grew by 22.1% in the first nine months of 2012
and reached CHF 592.9 million versus CHF 485.6 million one year earlier. In
constant exchange rates (CER) turnover growth was 20.9% in the period. The
good performance in the region was mainly driven by the strong growth of the
operations in North Africa as well as the good development in Russia. Dufry´s
operations in France, Switzerland, Spain, China and Sharjah (with new
destinations and flights) showed vigorous performance once again with double
digit growth in the period. Acquisitions of operations in Martinique and
Armenia in 2011 and Russia in 2012 contributed to turnover increase in the
region. The closing down of the Singapore operations negatively impacted
Region America I increased turnover by 78.4% to CHF 575.8 million compared to
CHF 322.8 million in the first nine months of 2011. In constant exchange rates
(CER) turnover growth was 67.1% in the period. The companies acquired in
August 2011 (Argentina, Uruguay and Ecuador) added 66.1% to the turnover
growth in the period. Operations in Mexico were supported by new airlines and
destinations and continued to see healthy growth rates. The operations in the
British Caribbean remained weak due to a change in the passenger profile and
different itineraries of the cruise lines affecting the numbers of customers.
The operations in Argentina and Uruguay were affected by the bankruptcy of the
Uruguayan airline Pluna at the beginning of July.
Region America II posted turnover of CHF 548.3 million at the end of
September, representing a growth of 2.7% from the CHF 534.1 million amounted
in the same period of 2011. In constant exchange rates (CER) turnover growth
was -4.1% in the period. Operations in Brazil continue to be impacted by the
economic slowdown in the country, a softening of the Brazilian Real against
the US Dollar, as well as capacity constraints in some of the Brazilian
airports. Dufry improved its profitability in the region which compensated for
the softer performance at turnover level. Apart from a strict cost management,
Dufry also increased its marketing and promotions initiatives to drive
Region United States & Canada grew its turnover by 18.3%. Turnover amounted to
CHF 613.9 million for first nine months 2012 compared to CHF 519.1 million one
year earlier. In constant exchange rates (CER) turnover growth was 9.8% in the
period. Turnover continues to show solid growth thanks to constantly adapting
and refining the assortment and introducing new products and partnerships
(e.g. Dunkin Donuts brand). The expansion of the duty free operations also
continues to be one of the key pillars for the development of this region.
Continued improvement of profitability
Gross margin grew by 80 basis points to 58.8% in the first nine months of 2012
from 58.0% in the same period one year ago. The global negotiations with
suppliers added further improvements to the gross margin, as did the
cooperation projects Dufry is currently running with key suppliers in terms of
as the brand plan and data sharing aiming to improve the supply chain as a
whole. The gross margin improvement was further supported by the synergies
from the companies acquired in 2011 and 2012.
Selling expenses reached CHF 517.3 million in the first nine months of 2012
versus CHF 414.7 million in the previous year. As a percentage of turnover,
selling expenses decreased by 0.2 percentage points to 21.9% compared to 22.1%
in the same period last year.
Personnel expenses amounted to CHF 354.0 million compared to CHF 292.2 million
in the first nine months of 2011. As a percentage of turnover, personnel
expenses stood at 15.0% versus 15.6% in the same period last year.
General expenses as percentage of turnover was flat at 6.7% when compared with
the first nine months of 2011. In Swiss Franc terms, general expenses grew to
CHF 158.8 million in the first nine months versus CHF 127.0 million in the
same period of 2011.
EBITDA improved by 40.5% for the first nine months of 2012 to CHF 360.2
million compared to CHF 256.4 million for the respective period in 2011.
EBITDA margin reached another record in the company's history at 15.2%,
improved by 160 basis points higher to 13.6% for the relevant period in 2011.
Depreciation and Amortization reached CHF 124.3 million for the first nine
months of 2012 compared to CHF 89.1 million in the same period last year.
Depreciation reached CHF 45.5 million compared to CHF 40.8 million in the
first nine months 2011. Amortization stood at CHF 78.8 million in the first
nine months 2012 versus CHF 48.3 million in the same period last year. This
increase is explained by the additional amortization deriving from the
acquisitions done in August 2011 and in January 2012.
Other operational result (net) was minus CHF 11.7 million for the first nine
months of 2012 versus an expense of CHF 21.2 million in the same period last
EBIT went up by 53.5% to CHF 224.2 million in the year to September 2012
versus CHF 146.1 million in the respective period of 2011. EBIT margin
increased to 9.5% in the 9 month period of 2012 from 7.8% one year earlier.
Net financial expenses came to CHF 53.0 million from CHF 34.2 million in the
first nine months of 2011. This increase is due to the additional debt of USD
1.0 billion structured in August 2011, to finance the acquisitions mentioned
Income taxes for the first nine months of 2012 amounted to CHF 30.2 million
compared to CHF 16.2 million for the corresponding period of 2011. The
effective tax rate, measured as percentage of EBT, stood at 17.6% compared to
14.5% the same period last year. Due to the seasonality of Dufry's business
the tax rate does vary along the year.
Net earnings to equity holders increased by 46.9% to CHF 116.2 million in the
first nine months of 2012 compared to CHF 79.1 million in the same period of
last year. Core EPS increased by 54.2% and went to CHF 6.66 in the first
nine months of the year versus CHF 4.32 in the same period in 2011. It is
worth highlight that the acquisitions made in 2011 were already EPS accretive
Cash generation supports the business growth
Net cash flow from operating activities improved by CHF 58.1 million, or
25.6%, and reached CHF 285.4 million in the first nine months of 2012 versus
CHF 227.3 million one year earlier. Capex for the period stood at CHF 80.3
million, compared to CHF 62.3 million registered in the first nine months of
Net debt was CHF 1,274.0 million, compared to CHF 1,346.7 million on June 30,
2012. The main covenant, Net Debt/adjusted EBITDA, stood at 2.92x, compared to
the threshold of 3.50x agreed with the lending banks. The Company deleveraged
by 0.75x in the last twelve months from 3.67x on 30 September, 2011.
Acquisition of the travel retail operations of the Folli Follie Group
On October 10th Dufry signed an agreement to acquire 51% of the travel retail
business of Folli Follie Group, having the option to acquire the remaining 49%
in four years time. The business is the leading travel retailer in Greece and
generated in 2011 turnover of EUR 291 million and EBITDA of EUR 84 million,
with an EBITDA margin of 29.0%. The acquisition is consistent with Dufry's
growth strategy focused on emerging markets and tourist destinations and will
strengthen its position in the Mediterranean region, the world's biggest
The total consideration to be paid by Dufry is EUR 229 million. The
transaction further foresees that the target business, which will be
carved-out from Folli Follie Group, will enter a new local non-recourse bank
facility of EUR 335 million at closing. The transaction is expected to close
early next year after completion of all relevant approvals. To finance the
transaction, Dufry concluded an equity increase on 11 October, 2012, of CHF
294 million through an accelerated bookbuilding by issuing 2.7 million shares.
Group refinancing and issue U.S. dollar denominated Senior Notes
Dufry refinanced its existing revolving credit facility (RCF) of CHF 415
million, which was due to expire in 2013, through a new committed 5 year RCF
of CHF 650 million with a syndicate of banks. The facility will be used for
general corporate purposes and will have the same covenants as the existing
Group credit facilities.
Dufry successfully placed US dollar-denominated senior notes in an aggregate
principal amount of USD 500 million to refinance the remaining term loans
expiring in 2013 of approximately CHF 502 million. The notes have a term of
eight years with the annual interest rate being 5.5 percent.
Another successful step towards a global diversification
Julian Diaz, CEO of Dufry Group, commented: "Dufry has delivered a strong set
of results in this first nine months of 2012. Once more, it showed that our
strategy focusing on emerging markets and tourist destinations works and we
were able to show a strong improvement in the profitability and achieved the
best EBITDA margin of 15.2% in the history of our company. At the same time,
our global diversification strategy allowed us to balance the different
performance in various locations and compensates any possible slowdowns in
specific regions with stronger growth in others. Dufry´s global
diversification has been key not only to preserve, but to further improve
profitability in the period.
The announcement we made last month to acquire 51% of the travel retail
operations of the Folli Follie Group was another step towards our global
diversification. With currently more than 80% of sales generated with
international customers, this is a high quality asset with attractive terms
and long term concessions and fits well to our business. We are convinced that
Greece will remain an attractive tourist destination in the medium and
long-term. This transaction will strengthen Dufry´s position in the
Mediterranean region, which is one of the most popular tourist destinations in
The refinancing of our credit facilities and the successful senior notes
issued represent the start of a new phase for the Company, as we have
strengthened the financing structure. Also, getting access to debt capital
markets adds another source of financing going forward. The new available
credit lines will allow us to continue pursuing opportunities in the still
fragmented travel retail industry.
Passenger numbers are forecasted to grow in the coming years and we are
convinced that the travel retail industry will continue to present
opportunities and, accordingly, we are prepared to exploit them. We will
continue with our strategy of profitable growth combining organic growth in
current operations with acquisitions and new operations. The performance in
our different locations will follow recent patterns and we do not expect any
major shift in the short term.
Key Figures Dufry Group
In CHF million 9M 2012 9M 2011 Variation
Turnover 2'363.9 1'879.0 25.8%
Gross Profit 1'390.3 58.8% 1'090.3 58.0% 27.5%
EBITDA (before other operational 360.2 15.2% 256.4 13.6% 40.5%
Net Earnings to Equity Holders 116.2 4.9% 79.1 4.2% 46.9%
Core Earnings per Share (in CHF) 6.66 4.32 54.2%
Dufry's First nine months 2012 Report is available on the following link:
 EBITDA before other operational result
 Core EPS (or adjusted EPS) is adjusted for acquisition-related
For further information please contact:
Sara Lizi Lubna Haj Issa
Investor Relations Media Relations
Phone: +55 21 2157 9901 Phone +41 61 266 44 46
Rafael Duarte Mario Rolla
Investor Relations Media Relations
Phone +41 61 266 45 77 Phone: +55 21 2157 9611
Dufry Group - A leading global travel retailer
Dufry AG (SIX: DUFN; BM&FBOVESPA: DAGB11) is the leading global travel
retailer operating more than 1'200 duty-free and duty-paid shops in airports,
cruise lines, seaports, railway stations and downtown tourist areas.
Dufry employs more than 14,000 people. The Company, headquartered in Basel,
Switzerland, operates in 45 countries in Europe, Africa, Asia, Latin America,
and North America.
Dufry cares for children and supports the SOS Social Center in Igarassu,
Brazil. SOS Children's Villages is an independent, non-political and
non-demonstrational organisation established for orphaned and destitute
children all over the world.
Media Release (PDF)
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