FRANCE/INTERNATIONAL. Lagardère Group today reported full-year results, with its travel retail division posting revenue of €3,927 million, up by +71.5% on a reported basis and +65.4% like-for-like. The difference between reported and like-for-like revenue is attributable to a €156 million positive currency effect and a €3 million negative scope effect.
Encouragingly, revenues for the year were just -9.6% lower than in 2019.
Revenue in France (like-for-like) jumped +75.7% on the back of soaring international air traffic, especially for European and transatlantic flights. The EMEA region (excluding France) saw revenue surge +91.2% due to a rally in regional and international travel, particularly in Western Europe and Poland.
The Americas also recorded a strong +51.6% increase in revenue, with business in the USA surging by +39.1%, even after the region made major gains in 2021. Canada (up +223.6%) enjoyed a healthy recovery, after health restrictions hampered business in 2021.
In 2022, the Americas region also benefited from the start-up of operations in Peru and Chile.
Asia Pacific revenue contracted by -1.7%, due mainly to the impact of the zero-Covid policy in China on passenger traffic.
Overall, with international traffic returning, duty free was the major driver of growth compared to 2021, though travel essentials and food service also contributed. Duty free & fashion accounted for 38% of sales (35% in 2021), travel essentials 39% (43% in 2021) and food service 23% (22% in 2021).
The division also posted a swing back to profit, with €136 million in recurring EBIT, a €217 million improvement on the prior year figure. This compares to of €152 million in 2019.
The group noted: “This performance reflects an exceptionally low flow-through ratio (impact of the decrease in revenue on recurring Ebit) of 4.9% versus 2019. The very low flow-through ratio resulted from the combined impact of various factors during the year, including the continued implementation of the LEAP performance optimisation programme, the rollout of innovative commercial initiatives, adjustments to leases and to headcount in certain countries, point-of-sale operations aligned with traffic trends and one-off Covid-related assistance.”
Fixed costs were slashed by €180 million in 2022 compared to 2019. One-off government and airport aid related to the health crisis amounted to almost €50 million in 2022.
On the outlook, Lagardère Travel Retail Chairman & CEO Dag Rasmussen told investors today: “January was very similar to December. We were above 2019 revenues in January and expect that to continue in February. We are cautiously confident for the year ahead. There are lots of possible headwinds such as inflation and geopolitical [issues] but we believe we have more tailwinds than headwinds.”
Group-wide (including Lagardère Publishing) the company posted consolidated revenue of €6,929 million, up +28.3%, and recurring EBIT of €438 million compared to €249 million in 2021.
Lagardère Chairman and CEO Arnaud Lagardère said: “The Lagardère group delivered a historic performance in 2022, reporting an improvement in all of its main financial indicators and confirming the relevance of the strategic refocusing carried out since 2012. Lagardère Travel Retail benefited from the rebound in tourist air traffic in Europe and North America, particularly in its duty free segment.”
On an investor call, Arnaud Lagardère added: “Lagardère Group is back, stronger than ever on its two legs [travel retail and publishing]. We believe in the business plan.”
CFO Sophie Stabile noted that for Lagardère Travel Retail, “2022 was a year of exceptional recovery”.
Despite the uncertain economic backdrop, Lagardère Group noted in a statement: “In a normalised environment, as global traffic continues to recover, Lagardère Travel Retail has potential for revenue and profitability growth.” ✈
