INTERNATIONAL. Dufry this morning announced a +15.7% year-on-year revenue increase for the first quarter, based on constant foreign exchange rates, with organic growth contributing +10.6%.
In absolute terms, turnover grew to CHF585 million (US$508 million). New activities accounted for 5.1 percentage points of growth and the foreign exchange impact of translating into Swiss Francs was negative -7.0%, mainly due to a weaker US Dollar.
Gross margin further improved by 1.2 percentage points to 56.6% in the first quarter of 2010 from 55.4% last time. In absolute terms, gross profit reached CHF331.0 million (US$287.3 million) for the first quarter of 2010. Dufry attributed the improvement to continuous growth of the company in several new locations, implementation of global negotiations with suppliers, and the new initiatives started in 2010 as part of the “˜Dufry plus One’ project.
EBITDA for the first quarter of 2010 increased by +20.7% to CHF70.1 million (US$60.8 million) at constant exchange rates.
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After translation into Swiss Francs, EBITDA increased by +11.6% to CHF64.8 million. The EBITDA margin was 11.1% compared to 10.8% for the relevant period in 2009. The EBITDA margin in Q1 2010 has already reached the levels of the Q1 of 2008, before the crisis of 2009, Dufry pointed out.
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“We have managed to increase our profitability although the economic environment has not yet shown signs of full recovery. We are very pleased with our performance and will remain focused on our target to enhance it even more in the months to come“ |
Julián Diaz Chief Executive Officer Dufry Group |
Depreciation and amortization charges remained flat at CHF31.4 million during the first quarter of 2010 compared to CHF31.6 million in the corresponding period of 2009. As both, depreciation and amortization, are equally distributed over the year, the seasonality of the turnover results in a higher percentage of turnover in the first quarter.
EBIT in the first quarter of 2010 increased by +27.3% to CHF31.7 million (US$27.5 million).
Turnover of Region Europe increased by +4.0% to CHF72.7 million (US$63.1 million). Italy started to improve its performance compared to last year and Switzerland performed well, Dufry said.
Region Africa increased its turnover by +2.3% based on constant exchange rates. In absolute Swiss Franc terms, Region Africa generated a turnover of CHF35.5 million (US$30.8 million) in the first quarter of 2010. Africa was Dufry’s only region that did not experience a decline in the first quarter of 2009 (due to the economic crisis which hit other regions). Dufry’s main operations in Tunisia and Morocco have performed well.
Region Eurasia’s turnover grew by +5.5% at constant exchange rates and stood at CHF51.1 million (US$44.4 million) in the first quarter. Within the region, certain Russian operations, plus Belgrade and Cambodia experienced solid growth, which was partially offset by the closing of some shops in Singapore. The new operations in China become operational at the end of March.
Turnover of Region Central America & Caribbean increased by +10.8% and stood at US$100.4 million in the quarter. Translating into Swiss Francs, turnover increased by +2.1% and reached CHF106.0 million. The Mexican operations benefited from an expanded business scope due to the local acquisition in October 2009.
The English-speaking Caribbean posted a weaker quarter than last year although in March, certain operations started to reverse the declining trend, Dufry said.
Region South America increased turnover by +30.9% to CHF146.4 million (US$127.1 million). The good performance of the Brazilian economy and the strong Real against the US Dollar contributed positively, Dufry said.
In Region North America turnover increased by +14.3% to US$160.4 million. Including the exchange impact, turnover reached CHF169.6, up by 5.3%. Hudson Group as well as the other locations, performed above last year, Dufry noted.
Financial expenses stood at CHF5.8 million in the first quarter of 2010 versus CHF14.2 million in the respective period of 2009, a decrease of CHF8.4 million. The improvement was mainly due to lower interest expenses resulting from the decrease in debt, improved cash management and a favourable interest rate environment.
As of March 31, 2010, net debt amounted to CHF 613.3 million (US$532.2 million), an increase of CHF3.5 million (US$3 million) compared to December 31, 2009. The strong cash generation was used to invest in Capex and a build-up of working capital due to the seasonality of Dufry’s business and specifically in preparation for Easter Holiday, which this year occurred early in the second quarter. In terms of financial covenants, adjusted EBITDA/Net Debt was well within the required range at 2.6x.
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GROWTH CONTINUES AMID IMPROVING CONDITIONS
Dufry said that the positive trends in the last quarter of 2009 continued to gain momentum in the first period of 2010. “The dynamic performance in South America, North America and parts of Eurasia were further supported by the resurgence of operations in Europe, and the English Caribbean with gradual recovery in passenger numbers and an increase in spending,” it noted.
It continued: “Dufry will continue to capture the positive momentum and is also dedicated to pursue profitable external growth targets.
“However, given the limited visibility in the global economic development, we will continue with our cautious stance and deploy our financial resources step-by-step, paying special attention to the sustainability of the efficiencies achieved and the lessons learnt in 2009 in managing the company based on fundamentals of travel retailing.”
Dufry continued to expand its operations during the first quarter of 2010. In Europe, new shops were opened in Italy and France to complement the existing network. Dufry has continued to strengthen its position in Mexico following the acquisition of further Mexican operations late last year, by re-organizing the retail space in Mexico City Airport and re-allocating retail formats. In the rest of the regions, shops opened in Morocco, Russia, Belgrade and Brazil.
Dufry Group CEO Julián Díaz commented: “During the first quarter of 2010, passenger numbers showed an upward trend with better performance of several regions compared to the previous year.
“Thanks to this and together with the implementation of our efficiency plan since last year, we have managed to increase our profitability although the economic environment has not yet shown signs of full recovery. We are very pleased with our performance and we will remain focused on our target to enhance it even more in the months to come.”
