ITALY. World Duty Free Group (WDFG) has posted consolidated revenues of €2,078.5 million in 2013, with currency fluctuations having a significant impact on the performance. Revenue grew by +3.8% at current exchange rates, but +7.1% at constant rates.
The retailer, which was listed on the Milan stock exchange after demerging from former parent company Autogrill on 1 October 2013, also reported a decrease in EBITDA at current rates, down -2.9% to €254.8 million (+0.6% at constant rates).
EBITDA was hit by currency fluctuations as well as start-up costs (mainly for WDFG’s new operation at Düsseldorf Airport), increased rental payments after winning the tenders for Spanish airports in December 2012 and the acquisition of HMSHost’s US retail operations shortly before the group’s stock listing.
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Despite those pressures net profit grew by +7.6% to €110.9 million (+12.7% at constant rates).
Revenues in the UK reached €975.6 million, up +1.4% at current exchange rates (+6.2% at constant rates). Traffic growth of +3.6% and a higher average spend per passenger aided the country result, although the higher proportion of lower-spending intra-European passengers hit revenue.
In the Rest of Europe sales reached €620.7 million, up +4.0%. The new Düsseldorf operation more than offset negative growth at Spanish airports (-4.1%), affected by the drop in traffic (-3.5%) and the impact of the closing stores. A lower number of Iberia flights and a less favourable passenger mix also hampered growth in Spain.
In the Americas revenues reached €322.2 million, up by +14.8% at current exchange rates (+19.4% at constant exchange rates). The addition of HMSHost’s US retail business contributed €44.8 million. Beyond HMSHost, the Americas business grew +2.8% at constant exchange rates, despite the negative impact of the exit from duty free operations at Atlanta and Orlando airports.
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The tender win at Helsinki Vantaa Airport was a key gain for WDFG in 2013 |
In Asia and Middle East revenues grew to €160 million, down -1.6% at current rates (up +2.6% at constant exchange rates).
The group noted a favourable start to the year, with revenues increasing by +11.6% at constant exchange rates and growth across all regions in the first eight weeks of the year. The new ex-HMSHost business has had a strong effect; excluding that operation, revenues would have grown by +4.2% at constant exchange rates.
“The recovery of a positive economic environment in Europe, which has started to be seen both in terms of traffic and consumer confidence, has been reflected in the good performance of the company in the first part of the year,” said WDFG.
Asia and Middle East are driving growth this year, while the UK and the rest of Europe have grown by +3.9% and +4.0% respectively in the first eight weeks. The company cited weaker growth in the Americas due to the financial situation.
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WDFG’s network-wide renovation in Spain has led to the creation of location-specific branding, such as Mallorca Duty Free at Palma de Mallorca Airport |
WDFG said in a statement: “From a management perspective, the most significant developments [in 2013] include the acquisition of the travel retail division of HMSHost in the USA from Autogrill Group, the reinforcement of the company’s position in its core markets (UK and Spain) and the acquisition of concessions in new markets, such as Finland after winning the tender to operate the travel retail activity at Helsinki Airport.
“The refurbishment and enlargement of the store portfolio operated in Spain; the international expansion achieved with new operations in Germany, Saudi Arabia, Brazil and Jamaica; and the beginning of operations in new categories following the acquisition in the USA, have left the group in a better position to benefit from the improvement in passenger traffic in more dynamic markets.”
WDFG key events 2013
14 November: WDFG won the tender to operate 11 stores at Helsinki Vantaa Airport – the retailer’s first business in the Nordic region.
5 November: WDFG opened its renovated and expanded stores at Barcelona El Prat Airport. Commercial space increased from 4,385sq m to 7,500sq m.
1 October: WDFG listed on the Borsa Italia in Milan – the culmination of a demerger process from parent group Autogrill.
22 July 2013: WDFG opened its new 2,659sq m store at Palma de Mallorca Airport – its biggest Spanish walk-through store to date.
14 June: WDFG opened the first-ever duty free store at A Coruña Airport, in 65sq m of space.
6 June: Autogrill shareholders backed a move for the proportional partial demerger of its key divisions and the creation of a new stand-alone travel retail entity under the World Duty Free name.
26 April: WDFG opened its first Collection store in Spain, at Palma de Mallorca Airport, ahead of the opening of its main tax and duty free store at the airport.
14 February: WDFG signed contracts to operate the travel retail concessions across Spain’s airports for the next seven years.
