INTERNATIONAL. Autogrill has reported an estimated negative impact on group revenue of approximately €25-30 million (US$27.7-33.3 million) as a result of the COVID-19 outbreak, as of the end of the first week of March.
The food & beverage company issued a trading update while approving the generally-positive preliminary consolidated results for 2019 that it reported in February.
In Italy, which accounts for 20% of group revenue, Autogrill said revenue had fallen €10-15 million as a result of a “severe traffic drop” since 22 February. There have also been some store closures and restrictions on high-margin bar counter service as well as on the overall network, the company noted.
A sharp decline in traffic in China and Vietnam (which accounts for approximately 1.5% of group revenue) since late January has resulted in an estimated negative impact on revenue of approximately €5-10 million.
In North America (53% of group revenue), the impact has been limited so far “mostly due to a reduction in international flights”. The estimated €5 million hit has been concentrated mostly in the last two weeks. Autogrill said local management has “already defined an action plan to deal with the situation and protect profitability” in the event of additional traffic restrictions.
There has only been a “minor impact” on revenue in the Rest of Europe region so far, Autogrill said.
“In 2019 we delivered strong results: we met all of our targets, with revenue, underlying EBITDA and reported EPS all in line with the full year guidance we provided to the market, and we registered improvements across all key metrics,” said Autogrill Group CEO Gianmario Tondato Da Ruos.
“Turning to 2020, considering the coronavirus outbreak, first of all, we have launched measures to safeguard the health and safety of our employees. With regard to this challenging macro environment, we put in place several initiatives to counteract the impact of this outbreak on revenues and profitability, including management of opening hours, store labour optimisation and G&A control.
“This is not the first time our group has faced external factors impacting travel demand: we know that travel is fundamental to people, and we believe the travel industry will rebound again as soon as the emergency is over. For this reason we remain committed to drive the business in a way that builds value for the long term.”
Autogrill said it had put a task force in place to “monitor and react to the evolving [COVID-19] situation on a daily basis”.
Consolidated revenue in 2019 was €4,997 million, a year-on-year increase of +3.5% at current exchange rates, and +6.4% at constant exchange rates.
Revenue growth was driven by the company’s airport business. Autogrill said that while it remained on track to meet 2021 targets, it would delay FY2020 guidance until more is known about the potential impact and duration of the COVID-19 outbreak.
In airports, 2019 revenue grew by +12.3% year-on-year (+8.1% at constant exchange rates), with all regions contributing. Like-for-like revenue growth was +4.6%, mainly driven by North America.
Autogrill reported €2.8 billion worth of new contract wins and renewals in 2019.
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The company also organises the annual Airport Food & Beverage (FAB) Conference & Awards. FAB 2020 will be held in Istanbul on 2 and 3 September. Istanbul Airport will host the event, which will be a celebration not only of the best in international airport dining but also of Turkish cuisine and culture. FAB 2020 will be supported strongly by Tum & Ictur, the concessionaire managing 34,000sq m of food & beverage space at Istanbul Airport.
