Avolta’s Capital Markets Day offered a sweeping overview of the business’ mid-term outlook and strong progress under its Destination 2027 strategy.

Avolta CEO Xavier Rossinyol was joined on stage by Chief Financial Officer Yves Gerster today as the duo staged its Capital Markets Day 2025 presentation, covering the progress made under its Destination 2027 strategy across SPP, turnover, capital allocation, the integral nature of data to its operational and financial future, while re-affirming its mid-term outlook.

“We are at the mid-point of Destination 2027 presented to the market in September 2022. Our strategy was based in four clear pillars, travel experience evolution based on the combination of retail and F&B, a high level of geographical variation as key to the resilience of the group, cost control, and a clear commitment to sustainability and people,” began Rossinyol.

He continued: “After the merger between Dufry and Avolta we have seen average growth of 10.5% per year with CHF85m in cost savings. We are the largest company in the industry geographically: 70 countries; 5000 POS, and a unique balance of business split across duty free, duty paid, and F&B.

Despite the impact of the Ukraine war, lower spend from Chinese passengers, ongoing issues in the Middle East and a slowdown in the US, we will continue to deliver on 5% to 7% organic growth.”

Geographical resilience

Rossinyol highlighted Avolta’s geographical resilience as key to weathering the flux of the current -and future – geopolitical landscape, pointing also to the massive growth Avolta predicts for global travel retail as a major boon to its future operations.

“We are in a growing industry, our industry has a size of $115bn US dollars, and it is expected to grow at a CAGR of 5% per annum. By 2030 it could reach $175bn across all channels.”

“This is a fragmented market,” he added, continuing with a comparison of Avolta against the wider industry players, both big and small: “We are the clear leaders in each of the key segments. Our competitors are global players, regional, local, but our size and diversification make us more resilient.”

Rossinyol addressed the opportunities inherent within a global rise in passenger growth, and what it could mean for Avolta’s bottom line.

“80% of the world’s population has never taken a flight. There is a massive airport boom coming. 1,500 airports planned for the next 20 years, and there have been 40,000 new aircrafts ordered.

If you look at the pricing of flights between the 90s and now, they have dropped by 50% overall. The affordability of flying is increasing, that’s why we have had a 4.3% CAGR on passenger numbers.”

Combined with Avolta’s new-found focus on amassing and utilising consumer data through its loyalty programme, as well as the fast turnarounds of its Milan-based Innovation Hub, Avolta Next, and the ingredients for steady organic growth are already in the mix.

Rossinyol covered the impact data collection and implementation has and will have on the business in greater detail during the Q&A portion of the presentation, covered lower down in this article.

Capital allocation

A key point of emphasis for both Rossinyol and Gerster was an unwavering focus on cost control, as he delved into Avolta’s overarching philosophies on contract renewals, joint ventures, and M&A.

“There is no better business than renewing existing space, and we have renewed 95% of contracts.

One thing we must remember these are not typically rental agreements, an airport is alive, flows, has operational changes, and airports get a percentage of our sales, so this is a daily collaboration, and of course there are the financials – airports want their return.

“We also lose sometimes, but we can be selective, what we’re trying to avoid is getting concessions we don’t want.” – Xavier Rossinyol, CEO of Avolta.

Rossinyol then detailed the changes Avolta has made to its physical presence, especially its focus on delivering hybrid concepts following an integration on the balance sheet of F&B with retail.

Before examining this however, let us take a look at what Gerster had to say about the financial model behind Destination 2027.

“Over the last two and a half years, we have clearly matched expectations, growing in 2023 by 16% and 2024 by 7% he stated, referring to Avolta’s year-on-year (YoY) growth.

Avolta’s YoY growth remained above 7% in 2024, driven by strong PAX and SPP, which Rossinyol and Gerster said will continue to bolster its global locations.

Gerster continued: “2/3 will come from PAX growth, while an additional 1/3 will come from increasing SPP through all growth engine initiatives.

Regarding profitability, our outlook was 20 to 40 basis points over the last two years and we have delivered on that, increasing the EBITDA margin by 20 basis points and by another 40 basis points at the top end of our guidance in 2024.”

Gerster also spoke to the changing tides of Gross Profit Margin (GPM) improvements within the industry.

Gerster noted: “Historically improvement in GPM was due to hard negotiation with suppliers and strategic pricing increase on customers. Things have shifted substantially over the last couple years.

Much more relevant nowadays is the access to data, management, analysis and use of it in regard to assortment, activations in collaboration with brands and dedicated pricing we can offer to specific groups.”

Equity free cash flow and concession fees

Gerster addressed pre-emptive questions over concession fees, too, noting: “Yes, over the last decade, concession fee has been increasing, there were clear reasons for that. We have seen a consolidation in the industry. We believe people nowadays are much more disciplined when it comes to tender and Minimum Annual Guarantees (MAG).

Secondly, the mindset from others of banking on the growth of Chinese pax in the years before covid has changed tremendously, and we see a flat(ish) evolution of the concession fee over time, and on a much more moderate level.

Change of concession fee tells you nothing about quality, cash flow or return on lifetime of a contract.”

Thanks in part to its asset-light business model, Avolta’s Equity Free Cash Flow hit CDF425m in 2024, while CAPEX as a percentage of TO remained at 4%.

Talking of cash flow, Gerster continued: “Cash flow conversion in 2024 has improved nearly 500 basis points and we are using that as the new baseline. The way we see CAPEX is in the efficiency improvement of every dollar we invest.

All our refinancings have been done opportunistically. We can do that at any moment in time to reduce interest expense moving forwards. We are an asset light business and that helps us when we see regional or wider business downturn.”

Flexible spaces and building loyalty

As mentioned previously, Rossinyol covered ground on Avolta’s dedication to building flexible and hybrid store concepts, explaining: “Before Destination 2027, an average of 15% space for activations. In our new gen stores we have between 40 and 45% of space as flexible space. We are working on more digital signage, more dynamic lighting, floor, ceiling, etc.

We have to stop as an industry thinking the same design will last for 10 or 20 years.”

Rossinyol continued: “Also very important is having a distinctive look and feel. That comes from both landlords and passengers. Airports are clearly pushing to have their own distinctive essence.”

Key to Avolta’s continued attempts to innovate and drive conversion has been its re-develoepd store formats, with the digital-first design allowing for shorter lead times.

We have 70 locations with hybrids; another 50 we are exploring in business development. Hybrid concepts in 2023 were 6% of our business development, in 2024, it was 16%, and in 2025 so far 26%. So, there is a clear opportunity on the combination on existing properties. This year we will reach 20% of sales from our smart stores.

There is a great possibility to enhance retail with F&B and vice-versa. We are convinced because of the data they can support each other with cross-sales and cross-promotions. 23% of our sales are generated where we have both, no physical changes.”

Open to the floor

Rossinyol and Gerster together fielded questions from the audience which addressed previous talking points centred around: new airport development: SPP and reginoal passenger growth: leveraging data; conversion; growth drivers; APAC; tariffs; stakeholder collaboration; the Avolta loyalty programme; inflation, and more besides.

Loyalty and data boom

Addressing questions around its integration of data, Rossinyol said: “Extracting value from data has never been so easy and so cheap, but first you need to have the data. It’s a journey, and we know more about our own business and pax than we did two years ago. With each new data scientist and data executive we learn how little we actually know.

The commitment to developing this infrastructure is very strong. It’s becoming itself a driver of the business.”

He continued: “We have had a massive push on rationalising the data. We didn’t even know how many coffees were sold because they were classified differently in different regions.”

#The examination of its data usage was certainly not limited to internal use either, as Rossinyol espoused the grand possibilities of potential alliances between operators and airlines, as Rossinyol highlighted the 2.5bn passengers it reached in 2024.

Rosinyol stated: “If you have the right mindset there is capacity to co-invest  if one day we achieve all three going to the next level of data sharing, who in retail and F&B knows which passengers are going to arrive at the airport by one?”

Avolta’s use of data and granular analytics is intrinsically linked to the emergence of its Avowal Club loyalty programme, about which Rossinyol remarked:”We are generating around 5% to 6% of total sales coming from loyalty members, and per country it is different. Some are at 20%, some are at 1%. Also the number of frequent flyers makes a huge difference.”

Earlier in the presentation, Rossinyol spoke of the new possibilities which had already opened up with the programme, such as ge0-notifications, in-app gaming, and generating a level of intimacy and interaction which would still drive immense value, even if membership numbers remained static.

New airport development

Addressing questions around new airport development and whether global passenger traffic was a fair benchmark given the level of investment in that area: Rossinyol said: “I think regarding new airports, we need to do a good job in renewing contracts, expanding into existing and new airports.

From a competition point of view, there will be opp for growth beyond just taking each other’s concessions, and it puts a rationale on your mindset.”

According to Avolta, the Global Travel Retail Market is set to grow to reach $175bn in value by 2030.

He added: “Very clearly, at least one factor is the Chinese passenger effect. The average SPP of Chinese pax pre-covid was 5x the average consumer. That factor is gone. What you will see is there is still some pressure on concession fee, but lower pressure than previously in the profit and loss column.

We have some concession in portfolio signed 20+ years ago. If you win more retail than F&B the concession fee will increase a little bit, but it won’t necessarily have an effect on EBITDA.”

The keys to regional success

Rossinyol offered a brief overview of Avolta’s regional growth plans, steadied by its immense global footprint: “Our portfolio is still missing growth in Asia to match the overall market growth. In Asia we believe we need to grow more because it’s a large market and growing faster than the world on average. Our emphasis on resilience pushes for that in MEA, increasing F&B in LATAM, and that’s the strategic focus.

Above that is financial discipline. I have confidence in our Asia team we will grow faster than the Rest of the World, but equally if the right conditions are not met, I am happy for that to be delayed.”

An overview of the core pillars influencing Avolta’s Destination 2027 strategy.

Staying on topic, he also addressed a key emerging market in the form of India: ‘There is also a perception that a boom could happen with Indian passengers, there is a lot of restructuring there due to companies who invested too much in Chinese pax, which will take a couple years to settle.”

Tariffs and inflation a non-issue

When discussing the issue of US imposed tariffs (and vice versa) and accompanying inflationary pressures, Rossinyol did not express much in the way of concern: “On one side you could have some positive effects because pricing is more competitive, but negatives on procurement in other parts of the business…We have conducted deep analysis across regions, as we believe overall effect will be neutral.

With higher or lower inflation we have protected our margins… inflation sometimes has indirect effects on exchange rates and flow of passengers, but in general because of our global presence the effects of inflation on the company are very limited.”

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