Autogrill shareholders have been smiling as the spin-off, today, of the Italian company’s Spain-based duty free and travel retail business has given them an overall share windfall.

 

Autogrill closed last night at €12.99 and opened today at 9am (CET) at €5.81, with World Duty Free Group opening at €7.20. By the close of the day, the share prices were €6.26 (+7.7%) and €7.90 (up +9.7%) respectively.

 

[Happy days: (from left) Gianmario Tondato, Chairman of World Duty Free and CEO at Autogrill; José María Palencia, CEO World Duty Free Group; and Gilberto Benetton, Chairman of Autogrill at a photo call just before WDF shares start trading.]

Existing Autogrill stockholders were given one WDF share for each of their Autogrill shares which means they made a +9.0% gain from today’s trading on Milan’s Mercato Telematico Azionario (electronic stock market).

 

At the launch event, at Borsa Italiana, Autogrill CEO and World Duty Free Chairman Gianmario Tondato pointed to the fact that since tapping into the DF&TR business through the acquisitions of Aldeasa, World Duty Free and Alpha between 2005 and 2008, the Ebitda of that business has more than doubled from €124m to €260m in 2012.

 

Tondato said: “We are closing a very successful chapter and opening two new ones that will be even better.” Referring to WDFG’s winged logo – which loomed large in the conference room on the ceiling – he added: “Now the butterfly flies away.”

 

Talking about the rationale for demerger, Tondato pointed to WDF’s now “very strong portfolio”, having held on to the crucial Spanish airport business [albeit at a very high cost] and, on the F&B side, “growth in sales and margins in the US which we can leverage”. He added that separation can now lead to “further industrial cooperation”, something that has been stressed throughout this merger process.

 

STABLE, LONG-TERM CONTRACTS

José María Palencia, CEO of World Duty Free Group (left), admitted that “being listed on the stock exchange was not an obvious choice” but added: “It was high time to strengthen the leadership position that was already there.” Part of that strength, he maintains, is the fact that WDF operates at six of the world’s top 10 airports and has contracts averaging over eight years in duration.

 

Asked by TRBusiness if WDF would now be in acquisitive mode and whether he considered Spain a drag on the business and on profitability, Palencia replied: “Now we have another gear with our stock and our equity. We want to be a reference in this sector… if that means being an acquirer, why not?

 

“For us Spain is a fantastic opportunity. It’s a long-term contract; we are not exposed to an airport, we are exposed to a country in the heart of Europe, to 28 airports. It’s true that Madrid Barajas is suffering today but it’s also true that the rest of the 27 airports are having a historic season in terms of tourism; Spain is a touristic superpower. We have already been at the lowest moment of the cycle.

 

“Aeronautical revenues are capped by law so the only way to make the airport business fly in the future is to increase dramatically the non-aeronautical revenues performance and this is exactly where (airport operator) Aena and WDFG is focused.

 

“So… I am seated in a long-term contract, I am the incumbent and I think there is a lot of value to be had. I am more than happy.” As, most likely, are shareholders after WDF’s first successful day in the markets.

 

[Taking flight: World Duty Free’s logo in ribbon form with screens showing early trading of Autogrill shares (left) and WDF shares (right)].