In the first half of 2009, Dufry's turnover increased by an impressive 21.4% to Swf.1,135.1m ($1bn) from Swf. 934.8m ($876.9m) in the first half of 2008. EBITDA (before other operational result) increased by 10% to

Swf.133.7m ($125.4m) compared to Swf.121.6m ($114m) for the respective period of 2008. But the company points to a tough business environment.

The negative impact of the current economic environment on passenger numbers, together with some specific effects, such as the swine flu in Mexico, resulted in an organic growth of -16.3%. The foreign exchange translation effect added 2.2 percentage points and the consolidation of Hudson as well as new projects contributed 35.5%.

In terms of development by region. turnover of Region Europe decreased by 19.4% to Swf.160.6m ($150.5m) compared to Swf.199.3m ($186.8m). The company said: ?The more pronounced decrease in Italy compared to the rest of the region, which was mainly as a consequence of Alitalia?s flight reallocation in the second quarter last year, will peter out in the second half of 2009. However, all operations performed below last year levels.

?Region Africa had a similar level of turnover when measured in local currencies. After translation into Swiss francs, Africa?s turnover decreased by 5.4% and amounted to Swf.87.6m ($82.1m) compared to Swf.92.6 m ($86.8m). Whereas Tunisia had a modest decrease, Morocco and most other locations achieved single-digit growth. Egypt performed particularly well and posted a double-digit growth.

?Region Eurasia?s turnover fell by 13.0% to Swf.109m from Swf.125.3m (from $102.1m to $117.5m). Some Russian operations experienced a strong decrease in sales as did the operations in South East Asia. This was partially balanced by the growth in Sharjah as well as selected Russian operations.?

The company added that following the acquisition of Hudson, Dufry proceeded with a regrouping of its operations in North America and Caribbean in order to reflect the geographical presence of the Group more accurately.

Turnover of Region Central America & Caribbean, which comprises all the business of the former Region North America & Caribbean except the US business, decreased by 18.8% to Swf.150.5m from Swf.185.3m ($141m from $173.7m) in the same period last year. The Mexican operations were negatively affected by the swine flu. The Caribbean business also saw a decrease as passenger reduced discretionary spending on larger tickets, such as watches and jewellery, and cruise lines attracted a higher proportion of customers with a lower purchasing power on average.

In the newly formed Region North America which comprises Hudson as well as Dufry?s original US business, turnover reached Swf.343.5m from Swf.22.2 m ($322m from $20.8m) in the first half of 2008 due to the consolidation of Hudson. On a proforma comparison, Hudson?s business model has proven to be resilient, even if it also suffered a decrease in passenger numbers in the US.

Region South America decreased by 8.4% to Swf.284m from Swf.310.2m ($266.3m from $290m). The global economic crisis continued to weigh on the performance of the South American operations as well.

GROSS PROFIT +24.4% TO $592.2m

Gross profit reached Swf.631.5m ($592.2m) for the first half of 2009, an increase of 24.4%, compared to Swf.507.8m ($476.2m) in the corresponding period of the previous year.

Gross margin improved further by 1.3 percentage points to 55.6% in the first half of 2009 from 54.3% in first half of 2008. The gross margin increase is a result of the various initiatives that Dufry carried out in the past years and was mainly generated in the first quarter of 2009.

Even so, the company said it was able to improve the gross margin in the second quarter as well, in line with the targets defined in its efficiency plan.

EBITDA for the first half of 2009 increased by 10% to Swf.133.7m ($125.4m) compared to Swf.121.6m ($114m) for the respective period of 2008. The EBITDA margin was 11.8% compared to 13% for the relevant period in 2008 and was impacted by the consolidation of the Hudson Group due to the different seasonality in its cost structure.

Thanks to the consistent implementation of the efficiency plan, Dufry said it reduced its overall fixed cost base by Swf.27m ($25.2m) and could partially mitigate the impact of the sales reduction on profitability. Dufry has a distinct seasonality with the second half being more important in terms of sales and due to the fixed cost, the seasonality is even more pronounced at EBITDA level.

Depreciation and amortization charges increased to Swf.62.2m ($58.2m) during the first half of 2009 compared to Swf.33.2m ($31m) in the corresponding period of 2008 mainly due to the consolidation of Hudson.

Depreciation amounted to Swf.32.6m ($30.5m) in the first half of 2009 compared to Swf.14.9m ($13.9m) in the first half of 2008. Amortization was Swf.29.6m ($27.7m) in the first half of 2009 compared to Swf.18.3m ($17.1m) in the respective period of 2008.

EBIT in the first six months of 2009 reached Swf.65.6m ($61.4m) compared to Swf.78.8m ($73.7m) in the respective period of 2008.

Financial expenses increased by Swf.17.8m to Swf.23.9m (by $16.6m to $22.3m) in the first six months of 2009 from Swf.6.1m ($5.7m) in the respective period of 2008. The increase, which is due to higher interest expenses resulting from higher debt charges assumed following the Hudson acquisition was partially compensated with lower interest rates levels in the market.

Income taxes for the first six months of 2009 decreased and amounted to Swf.8.3m ($7.7m) compared to Swf.17.2m ($16.1m) for the corresponding period of 2008.

The tax rate measured as percentage of EBT fell by 3.8 percentage points to 19.9% from 23.7%.

Net earnings for the Group stood at Swf.33.4m ($31.2m) in the first half of 2009 compared to Swf.55.5m ($51.9m) in the same period of 2008. Excluding minority interests, net earnings to equity holders in the first half of 2009 were Swf.10.4m ($9.7m) compared to Swf.28m ($26.2m) in the respective period of 2008.

The seasonality effect in Dufry?s business is magnified at net earnings level due to the fixed nature of depreciation and amortization as well as financial expenses, which is even more pronounced after the acquisition of Hudson Group.

The company said: ?The focus on cash generation has been one of the key themes for 2009. Dufry has delivered strong results and reduced net debt by Swf.101.7m ($95.2m) in the first half of 2009. This compares to an increase in net debt of Swf.11.2m ($10.4m) in the same period of 2008, excluding the investment in Hudson in the respective period.?

NET DEBT REDUCTIONS

As of June 30, 2009, net debt amounted to Swf.722.5m ($676.8m) compared to Swf.824.2m ($772.1m) at December 31, 2008 and Swf.942.6m ($883m) at October 31, 2008, just after the closing of the Hudson transaction.

The strong cash flow generation was due to the improvements in net working capital, contained capital expenditure as well as a cost reduction programme, all of which have been implemented as part of the efficiency plan. With adjusted EBITDA/Net Debt at 2.9x, Dufry was well below the respective threshold of 3.5x. As for interest expense/adjusted EBITDA, the headroom was even bigger with the ratio being 6.1x, 53% above the threshold of 4.0x.

Commenting on the results, the company said: ?Putting Dufry?s results into the perspective of the challenging environment in the first six months of 2009 where passenger numbers and spending power declined globally on the back of a severe global recession, the group has delivered a solid performance.

?Thanks to the efficiency plan, which was introduced rapidly at the end of 2008, Dufry was able to reduce fixed costs across the board and to deliver an EBITDA margin of 11.8% in the first half of 2009. Moreover, Dufry?s cash flow from operations has been impressive, especially in today?s situation where the ability to generate cash is more important than ever.

?Going forward, visibility remains very limited. In the past six months, international passenger numbers seem to have stabilized at about 8% below last year?s levels, and forecasts indicate a gradual improvement going forward. In this respect, Dufry will continue to manage its business based on the latest available trends for the time being.?

Julian Diaz, Ceo of the Dufry Group said that the company has been very demanding on its business in what has been a difficult six months in terms of the environment.

?We have been able to demonstrate that Dufry can adjust quickly to the challenges and the new circumstances. With the implementation of the efficiency plan, we have been able to safeguard our profitability and to drive cash generation. Equally, the Hudson business has proven resilient despite the fact that it was also impacted by the recession.

?The integration and the business development have started to generate synergies and this has further supported Hudson?s performance. As such, the transaction has met our expectations and we will continue to realize the potential Hudson has contributed to our group.

?Last but not least, we have continued to develop our concession portfolio and we have more than 10,000sq m of retail space, which we will open throughout 2009.

?Looking beyond 2009, our growth strategy remains unchanged and a significant number of interesting opportunities are coming to the market. We will assess them carefully and some of them might materialize. We believe that the consolidation in our industry will continue in the longer term and Dufry will remain at the forefront as one of the leading operators?.