The duty free and travel retail division of media group, Lagardère, almost single-handedly drove revenue growth for the French listed company in the first half of 2016.

On a consolidated basis, Lagardère Travel Retail (LTR) grew by +9.1% to generate revenue of €1,790m/$1,980m, while the group’s three other divisions were flat or negative in the period (see table below).

In the first half of 2016, Lagardère Group revenue totalled €3,431m/$3,793m, up +3.8% on a consolidated basis and up +0.5% like-for-like. The difference between consolidated and like-for-like data reflects a €42m negative foreign exchange effect [due notably to the depreciation in the pound sterling (a €17m negative impact)], and a €153m positive scope impact, essentially relating to LTR.

LTR was also the only division to increase its recurring EBIT result [by +€6m to €36m] but that was not enough to offset declines from other divisions (see table below), which resulted in group recurring EBIT falling from €122m in H1 2015 to €101m in H1 2016.

‘A MAJOR GROWTH ENGINE’

Lagardère Group acknowledges DF&TR as a “major growth engine” saying: “Travel retail delivered strong growth despite the impact of terrorist attacks in Europe thanks to strong network momentum.”

 

LTR’s H1 revenue of €1,790m (up +9.1% consolidated, and up +5.4% like-for-like) was led by network expansion, the rollout of new concepts such as its Aelia ‘next generation’ stores, and an improved product mix.

TERRORISM’S TOLL ON DUTY FREE/FASHION

Despite the impact of terrorist atrocities in France [and ‘concern about France as a destination’] business there held up over the first six months of 2016 (at +0.3%). But there were casualties: LTR’s Duty Free/Fashion segment saw a slowdown following the Paris and Brussels attacks which was countered by a good performance of LTR’s other two pillars: Travel Essentials and Foodservice on the back of network expansion.

Europe (excluding France) had strong momentum (up +12%), spurred by development, particularly in Poland (+29.0%), and the start-up of activities in Iceland and Luxembourg.

The fast-paced growth of operations in Italy (+8.4%) continued during the period, lifted by the growth in traffic and the opening of new sales outlets.

Romania also posted a robust performance (+24.4%) lifted by the rise in tobacco prices. The Czech Republic rose by +5.0% despite the impact of lower spending by Russian passengers.

In North America, trading was also good (+5.1%) on the back of network development and good performances from the legacy business. On the €485m US acquisition of Paradies, Lagardère Group says that its performance, as well as synergies, are in line with expectations.

In Asia-Pacific growth was a healthy +15%, lifted by the continued development of fashion activities in China and the start-up of DF&TR operations in Auckland airport in July 2015.

During the period, LTR’s distribution business was down -3.1%, hit once more by discontinued export sales in Hungary.