SWITZERLAND. Dufry Group today outlined its strategy for continued growth after unveiling an impressive set of full-year results last week. Profitability, rather than sales, will be the target, insisted an upbeat CEO Julián Diaz, who was speaking at the company’s 2005 results presentation in Zürich, which was attended by The Moodie Report.
Diaz said that Dufry would focus heavily on emerging markets in the search for future growth. He identified three main areas, the “corridors” of Asia, the Mediterranean and Latin America, for expansion. Diaz reiterated the company’s strategic focus on airports as the prime channel, but said that further development was targeted at seaports and cruiselines. In certain regions such as the Caribbean, the downtown market, hotels and resorts would prove important.
Among the product categories, he pointed to an emphasis on non-traditional sectors such as fragrances and cosmetics, food and luxury goods as potential growth areas. In Dufry’s net sales for 2005, fragrances and cosmetics accounted for 21%, wines and spirits 17%, tobacco goods and watches and jewellery 14% each, food was 12%, electronic items 7%, with 15% sold in other categories.
Diaz said the acquisition of Brasif would support the group’s drive towards increased profitability. The implementation of the business plan has begun, he said, and the company would be fully integrated into Dufry within 15 months. Brasif sales are consolidated with those of Dufry from April 1. Dufry’s portion of the US$500 million purchase of Brasif was US$400 million, he revealed, with minority partner Advent Funds (Latin America) contributing the balance. Dufry’s portion is fully financed with debt and underwritten by ING bank.
As previously reported, the duration of Brasif’s concessions are in line with the rest of the Dufry Group, at an average seven to nine years. Dufry also revealed a split of net sales by duration of contracts in its results today. In 2005, 34% of sales came from contracts nine years long or more; 22% from contracts of six to nine years duration; 28% from contracts of three to five years; and 16% from contracts with one to two years remaining.
MORE STORIES ON DUFRY
Dufry unveils +19% rise in EBITDA as sales rise +12% – 28/04/06
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
