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“Travel Retail continues to see excellent income results and strong cash flow generation.“ |
Gianmario Tondato da Ruos CEO Autogrill |
INTERNATIONAL. Autogrill Group today revealed first-half results to 30 June, with the Travel Retail & Duty Free division performed strongly, posting revenues of €922.9 million, up +3.8% (+2% at current exchange rates) on the same period in 2012.
Within Travel Retail, the UK saw +5.4% growth in sales against a +2.7% increase in passenger flows. The key airports contributing to this result were Heathrow, where revenues (£179.3 million) rose +4.2% against +2.4% growth in traffic, and Gatwick (sales up +10.9% with traffic growing at +2.4%), partly due to the new walk-through store opened in July 2012.
Revenues in Spanish airports were down -5.5%, partly due to the closure of a number of points of sale at Madrid Airport. Like for like, the contraction would be limited to -1.9% against a -5.9% reduction in traffic, said Autogrill.
In Spain, Barcelona Airport showed the best sales performance (+4.2% against a -1.8% fall in traffic), while at Madrid an increase in the average passenger receipt value partially limited the contraction in sales, which dropped -9.1% on a like-for-like basis against a -14.7% slump in traffic.
Travel retail revenues in other countries grew +9.3%, with double-digit growth in Vancouver Airport and in Jordan. The overall result also reflected new openings in Germany, Jamaica and Mexico.
Ebitda in the Travel Retail sector was €109.8 million, down -1.5% (-3.1% at current exchange rates) on H1 2012 due to the start-up phase of new openings (especially Düsseldorf) and increases in rents following contract renewals in Spain. The Ebitda margin decreased from 12.5% to 11.9%.
Net capital expenditure in the period amounted to €9.5 million, in line with 2012 and was
related to Barcelona, Palma de Majorca and Madrid airports.
The net financial position of the Travel Retail & Duty Free sector at 30 June 2013 was €935.9 million, up €374.4m on 31 December 2012. The change was mainly due to the net cash flow generation for the period (€134.7 million), against which there were outlays of €279 million relating to advance fees paid to AENA following the award of the Spanish airport concessions and of €220 million for an extraordinary dividend paid to Autogrill SpA in connection with the planned demerger of this division.
Travel Retail demerger
Importantly, although the group revealed details of the Travel Retail & Duty Free performance, Autogrill’s consolidated group results for the half refer to the food & beverage business only. This is due to the planned demerger of the travel retail arm, due to occur in October.
Taking this into account, group consolidated revenues were down slightly at €1,837.8 million and EBITDA was €102.8 million against €104.2 million a year ago (-0.3%).
In its half-year statement, the company said that F&B sales in the USA continued to grow faster than traffic due mainly to the increase in average spends. Business is picking up in Europe except for Italy, which continues to be hit by the impact of the economic crisis.
By channels, the trend was positive in airports and railway stations, noted the group. “These results almost entirely offset the persistent difficulties on Italian motorways, where low spending, the contraction in traffic and a weaker propensity to break journeys are delaying a recovery in the business.”
The slight dip in Ebitda (-0.3%; -1.3% at current exchange rates) relates to restructuring charges. Net of this, the change in Ebitda would be a positive +1.2%.
“This half shows marked growth in the airport business,” said Autogrill CEO Gianmario Tondato Da Ruos. “The trend in the United States was good, and beginning in the second quarter Europe began to gain increasing solidity, with the exception of Italian motorways. Travel Retail continues to see excellent income results and strong cash flow generation.”
The net profit for the group (including Travel Retail & Duty Free) was €4.3 million against €11.9 million in H1 2012. This figure includes the net profit for ongoing business (Food & Beverage), a negative €32.6 million (-€25.8 million in H1 2012), and the net profit for the business to be demerged (Travel Retail & Duty Free), which was €42.6 million (€42.8 million in H1 2012).
The profit for the period was affected by an income tax charge of €10.2 million, an increase from €1.7 million in H1 2012, “due to the fact that no provision was made for deferred tax assets due to losses in some European countries, especially in Italy”, the group said.
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Outlook 2013
In the first 29 weeks Food & Beverage sales were down -0.1% (-1.1% at current exchange rates) on the same period in 2012, while revenues in the Travel Retail & Duty Free business rose +3.4% (+1.2% at current exchange rates).
Autogrill said: “The change in the group’s perimeter brought about by the demerger process means that the results for 2013 should be compared with those of the previous year by looking at the two business sectors separately.”
In the Food & Beverage sector in 2013, the group expects revenues of around €4,050 million, with sales rising in North America and the Pacific to offset the contraction in Italy. Ebitda (including Corporate costs) is expected to be between €315 million and €325 million. The ratio of Ebitda to sales is expected to be in line with last year. Investments for the year are expected to be around €180 million.
The group expects to see Travel Retail & Duty Free revenues in 2013 of around €2,050 million, with Ebitda between €250 million and €260 million, in line with last year’s result despite rising concession fees in Spain and the negative effect resulting from the difference in the Euro/Sterling exchange rate used in its forecasts and in the actual rate for 2012.
Investments are expected to be over €70 million, well up on 2012 (€27.9 million) due to activities relating to the new Spanish airport contracts.
Parallel to activities in connection with the demerger, the group controlled by WDFG SAU (the new travel retail entity) is also acquiring the travel retail business in North America currently run by the subsidiary HMSHost.
For the sake of comparison and given that this business will be transferred in September 2013, the current forecasts for this year assume that the North American travel retail results are included in the Food & Beverage sector for the whole of 2013. In 2012, this business generated revenues of US$243 million, with Ebitda of US$23 million and investments of US$21 million.
