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Chief Executive Officer Julián Diaz: “This success is a direct result of the implementation of our consistent corporate strategy and we will continue to work hard to be the industry’s most innovative and profitable company.” |
SWITZERLAND. Dufry this morning unveiled an impressive set of full year 2005 results.
In what was “a successful year”, Dufry said, turnover for the fiscal year 2005 grew by +12% to CHF949.8 million (US$675.1 million at today’s exchange rate) from CHF 850.5 million for the 12 months pro forma period 2004.
In terms of profitability, EBITDA (before other operational results) amounted to CHF100.1 million (US$79.4 million) for 2005, compared to CHF 83.8 million last time, representing an increase of over +19%. EBITDA margin rose to 10.5% for the fiscal year 2005 from 9.9% for 2004. Net earnings before minorities surged by more than +70% to CHF52.7 million (US$41.8 million).
Chief Executive Officer Julián Diaz said: “In many respects 2005 has been an excellent year for Dufry: We generated strong top-line growth and improved our profitability across the Group. This success is a direct result of the implementation of our consistent corporate strategy and we will continue to work hard to be the industry’s most innovative and profitable company.”
Dufry said that sales growth was generated across all regions and reflects the continued increase of passenger numbers worldwide. Furthermore, several new projects and expansion projects started to contribute to turnover in 2005. Several of these projects became operative in the last quarter of 2005, meaning the full effect of these projects will occur in 2006, Dufry said.
Development by Region
Europe increased its net sales by +4.8% to CHF327.5 million (US$259.8 million) from CHF312.5 million. In terms of important new projects, the retail area in Milan was improved and expanded and new shops were opened at Rome Airports at the end of 2005, which will fully contribute in 2006. Furthermore, new concessions at the Spanish airports of Tenerife, Mallorca and Bilbao were signed, all of which will start operating in 2006.
In Africa net sales grew by +7.4% to CHF127.9 million (US$101.5 million) from CHF119.1 million. Morocco especially saw strong growth, which was partially driven by the opening of new shops in Casablanca and Agadir in the second half of the year.
Eurasia & Asia generated net sales of CHF149.9 million (US$118.9 million), an increase of +12.7% compared to the CHF133.1 million in 2004. All operations enjoyed double-digit growth, Dufry said. New projects supported this performance, the most important being the expansion in Sharjah, UAE, and Singapore, where several shops were opened throughout 2004 and a flagship watches shop was opened in late 2005. The new shops in Hong Kong SkyPlaza, for which the contract was signed in 2005, will become operative in 2006.
Net sales in the Americas & Caribbean increased by +20.4% to CHF327.5 million (US$260.3 million) compared to CHF272.0 million for the previous 12 months. Of this increase, CHF22.9 million (US$18.2 million) relates to consolidation effects including the acquisition of the remaining 50% of Young Caribbean Jewelry through Dufry’s subsidiary Duty Free Caribbean.
New projects and expansions in this region also include new airport shops in the Dominican Republic, new shops on six additional ships of Norwegian Cruise Lines and the new Dufry Boulevard at Mexico-City airport. Most of these projects became operational towards the end of 2005.
Gross profit increases; other financial information
Gross profit increased by +15.7% to CHF472.2 million (US$375 million) in 2005, “mainly as a result of improvements in the pricing policy, the product assortment, the logistics strategy and supplier partnerships”.
The increase of the EBITDA margin by 0.6 percentage points to 10.5% reflects the improvements made at gross profit level which were partially offset against higher selling expenses.
EBIT increased by +47.1% to CHF71.5 million (US$56.8 million) compared to CHF 48.6 million in the previous 12 months. EBIT margin rose by 1.8 percentage points to 7.5% in 2005 from 5.7% for 12 months pro forma 2004.
Net earnings grew from enhanced operating performance plus improvements on the financial and tax structures.
At 31 December 2005, Dufry Group had a net debt of CHF47.0 million (US$37.4 million) compared to CHF157.3 million at the end of 2004. At the same time, equity increased to CHF446.0 million (US$354.6 million) at 31 December 2005 from CHF139.5 million one year before. The strengthening of the equity was due to a capital increase in July as well as the IPO in December 2005.
Developments in 2006
For 2006 and beyond, Dufry said it expects the positive trends in the travel industry to continue. Passenger numbers are forecasted to grow at a steady rate over the next couple of years. In terms of performance, the first quarter, which is traditionally the slowest for Dufry, has started well although, as a comparison to 2005, it has been impacted by Easter holidays falling into the second quarter 2006.
Dufry Group has further developed its concession portfolio in the first quarter of 2006 by acquiring Brasif, the leading travel retailer in Brazil as well as Eurotrade, its logistics platform. Furthermore, new projects were signed for Belgrade airport in Serbia and Algiers airport in Algeria.
COMMENT: The news keeps getting better and better for the Swiss travel retailer since it made its debut on the Swiss Stock Exchange on 6 December 2005. The performance in Eurasia & Asia is particularly noteworthy, reflecting in particular significantly expanded space at one of the company’s most unsung yet effective operations – Sharjah International Airport. Singapore Changi Airport is becoming another success story with Dufry’s confectionery-to-consumer technology offer flourishing and winning both landlord and consumer acclaim.
In the Americas and Caribbean, sales soared as the diversity of the retailer’s portfolio helped offset problems caused by hurricanes in the region.
CEO Diaz has long emphasised his determination to create a truly balanced global portfolio – not just by outlets but in both sales and profitability terms. He appears to be well on his way to delivering that.
Next year’s results will include recent acquisition Brasif which will be profit enhancing from the outset. Additionally a range of new projects and expansions will kick in. Allied to a projected increase in passenger numbers in all regions, the outlook for the industry’s ‘hot’ retailer of the moment looks brighter than ever.
MORE STORIES ON DUFRY
Dufry names José Carlos Costa da Silva Rosa as Chief Operating Officer for South America – 19/04/06
On the record: Julián Díaz on how Dufry has “˜bloomed’ with the Brasif acquisition – 07/04/06
South America becomes number one sales region for Dufry following the Brasif acquisition – 03/04/06
